Division  J  K  £  ~?  I 
Section  .lx 


V 


AMERICAN-  SOCIAL  PROGRESS  SERIES 


\ 


SOCIAL  REFORM  AND  THE 
CONSTITUTION 

Tbe  Kennedy  Lectures  for  ipu ,  in  the  School  of  Philanthropy, 
conducted  by  the  Charity  Organisation  Society  of  the  City 
of  New  York,  and  affiliated  with  Columbia  University 


AMERICAN  SOCIAL  PROGRESS  SERIES 

EDITED  BY 

Professor  Samuel  McCune  Lindsay,  Ph.D.,  LL.D. 
Columbia  University 


A  series  of  handbooks  for  the  student  and  general  reader, 
giving  the  results  of  the  newer  social  thought  and  of  recent 
scientific  investigations  of  the  facts  of  American  social  life  and 
institutions.  Each  volume  about  200  pages. 

1.  THE  NEW  BASIS  OF  CIVILIZATION.  By  Professor 

S.  N.  Patten,  Ph.D.,  LL.D.,  University  of  Pennsylvania. 
Price  5l  oo  net. 

2.  STANDARDS  OF  PUBLIC  MORALITY.  By  Arthur 

Twining  Hadley,  Ph.D.,  LL.D.,  President  of  Yale 
University.  Price  $1.00  net. 

3.  MISERY  AND  ITS  CAUSES.  By  Edward  T.  Devine, 

Ph.D.,  LL.D.,  Columbia  University.  Price  $1.25  net. 

4.  GOVERNMENTAL  ACTION  FOR  SOCIAL  WEL¬ 

FARE.  By  Jeremiah  W.  Jenks,  Ph.D.,  LL.D.,  Cor¬ 
nell  University.  Price  $1.00  net. 

5.  SOCIAL  INSURANCE.  A  Program  of  Social  Reform. 

By  Henry  Rogers  Seager,  Ph.D.,  Columbia  University. 
Price  $1.00  net. 

6.  THE  SOCIAL  BASIS  OF  RELIGION.  By  Simon  N. 

Patten,  Ph.D.,  LL.D.,  University  of  Pennsylvania. 

7.  SOCIAL  REFORM  AND  THE  CONSTITUTION.  By 

Frank  J.  Goodnow,  LL.D.,  Columbia  University.  Price 
$0.00  net. 


THE  MACMILLAN  COMPANY 

64-66  Fifth  Avenue,  New  York 


SOCIAL  REFORM  AND  THE 


FRANK  J.  GOODNOW,  LL.D. 

EATON  PROFESSOR  OF  ADMINISTRATIVE  LAW 
AT  COLUMBIA  UNIVERSITY 


Nett)  gork 

THE  MACMILLAN  COMPANY 


1911 

All  rights  reserved 


Copyright,  19x1, 

By  THE  MACMILLAN  COMPANY. 


Set  up  and  electrotyped.  Published  September,  1911. 


\ 


Norfoootf  $rfB8 

J.  S.  Cushing  Co.  —  Berwick  &  Smith  Co. 
Norwood,  Mass.,  U.S.A. 


PREFACE 


In  Social  Reform  and  the  Constitution  the  attempt 
has  been  to  ascertain,  from  an  examination  of  the 
decisions  of  our  courts,  and  particularly  those  of 
the  United  States  Supreme  Court,  to  what  extent 
the  Constitution  of  the  United  States  in  its  present 
form  is  a  bar  to  the  adoption  of  the  most  important 
social  reform  measures  which  have  been  made  parts 
of  the  reform  program  of  the  most  progressive 
peoples  of  the  present  day.  This  purpose  has  neces¬ 
sarily  involved  a  discussion  of  political  reform  as 
well,  since  social  is  inextricably  bound  up  with  politi¬ 
cal  reform  in  the  present  conditions  of  the  United 
States. 

In  what  has  been  said  as  to  the  concrete  measures 
of  reform  discussed,  the  author  has  attempted,  suc¬ 
cessfully  it  is  hoped,  to  refrain  from  passing  judg¬ 
ment  on  the  desirability  of  such  measures,  and 
particularly  from  expressing  any  opinion  as  to  their 
expediency  in  the  conditions  of  present  American 
life.  His  hope  has  been  merely  to  set  forth,  so  far 
as  in  him  lay,  accurately  and  impartially,  the  consti¬ 
tutional  law  upon  some  of  the  most  vital  social  and 
political  problems  which  the  American  nation  is  now 
attempting  or  will  soon  be  called  upon  to  solve.  This 
hope  and  the  further  desire  to  lighten  the  labors  of 
future  students  of  this  most  absorbing  subject  are 


VI 


PREFACE 


the  only  justification  for  his  presuming  to  add  another 
to  the  already  rather  formidable  list  of  studies  on 
that  most  interesting  instrument  of  government,  the 
Constitution  of  the  United  States. 

The  substance  of  the  following  pages,  with  the 
exception  of  Chapter  III,  on  “The  Power  of  Congress 
to  charter  Interstate  Commerce  Corporations,”  was 
read  before  the  New  York  School  of  Philanthropy, 
as  the  Kennedy  Lectures  for  1911.  Chapter  III  was 
prepared  at  the  suggestion  and  under  the  direction  of 
the  author  by  one  of  his  former  students,  Mr.  Sidney 
D.  Moore  Hudson,  now  Instructor  in  Government  at 
Bryn  Mawr  College,  and  together  with  Chapter  II,  on 
the  “Constitutionality  of  Uniform  Commercial  Regu¬ 
lations,”  and  Chapter  IV,  on  “  The  Power  of  Congress 
over  the  Private  Law  in  P'orce  in  the  United  States,” 
both  the  last  two  in  abbreviated  form,  appeared  in 
the  Political  Science  Quarterly.  Part  of  Chapter  VII, 
on  “  The  Constitutionality  of  Government  Aid,”  was 
first  published  in  The  American  Political  Science 
Review. 

FRANK  J.  GOODNOW. 

Washington,  D.C. 

August,  1911. 


TABLE  OF  CONTENTS 


CHAPTER  I 

PAGE 


The  Demands  of  Social  Reform  .  .  .  .  i 

I.  Introduction  .......  i 

II.  The  Political  Problems  of  the  United  States  .  6 

III.  The  Social  Problems  of  the  United  States  .  .  18 

1.  Government  Ownership  .  .  .  .18 

2.  Government  Regulation  ....  20 

3.  Government  Aid . 25 


CHAPTER  II 

The  Constitutionality  of  Uniform  Commercial 


Regulation . 33 

I.  The  Power  of  Congress  to  regulate  Navigation  .  39 

II.  The  Power  of  Congress  to  regulate  Transporta¬ 
tion  by  Land  ......  54 

III.  The  Power  of  Congress  to  regulate  Commerce 

other  than  Transportation  ....  75 

IV.  The  Power  of  Congress  to  prohibit  Commerce  .  80 

V.  The  Power  of  the  States  to  prohibit  the  Intro¬ 
duction  and  Sale  of  Articles  ....  93 

VI.  Conclusions  .......  95 

1.  Commerce . 95 

2.  Commerce  among  the  States  ...  96 

3.  The  Power  to  regulate  Commerce  .  .  97 


CHAPTER  III 

The  Power  of  Congress  to  charter  Interstate 

Commerce  Corporations . 100 

vii 


TABLE  OF  CONTENTS 


CHAPTER  IV 

The  Power  of  Congress  over  the  Private  Law  in 
Force  in  the  United  States  . 

I.  The  Extent  of  the  Legislative  Power  of  Congress 
under  the  Judicial  Article  of  the  Constitution 

II.  How  far  Congress  has  exercised  its  Powers 

III.  The  Effect  on  our  Law  of  the  Exercise  by  Con¬ 
gress  of  its  Power  ...... 

CHAPTER  V 

The  Constitutionality  of  Political  Reform  . 

I.  The  Separation  of  Governmental  Powers  . 

II.  Republican  Form  of  Government 

III.  Government  Ownership . 

CHAPTER  VI 

The  Constitutionality  of  Government  Regulation 

I.  Labor  Regulations  ...... 

II.  Regulation  of  the  Use  of  Property  in  Urban  Dis¬ 
tricts  ........ 

III.  Property  affected  with  a  Public  Interest 

IV.  Regulation  by  Taxation . 

V.  Regulation  of  Monopoly . 

CHAPTER  VII 

The  Constitutionality  of  Government  Aid 

I.  Proper  Purposes  of  Taxation  .  .  .  . 

II.  Pensions  in  Case  of  Old  Age,  Accident,  or  Sick¬ 
ness  ........ 

III.  Provision  for  the  Housing  of  the  Working  Classes 
in  Cities . 

CHAPTER  VIII 

The  Attitude  of  the  Courts  towards  Measures  of 
Social  Reform . 


PAGE 

146 

150 

202 

203 

210 

210 

225 

23I 


243 

243 

258 

264 

274 

283 

292 

292 

3°o 

3i7 


329 


TABLE  OF  CASES 


Adair  v.  United  States,  208  U.S.  161  .  .  .  82,  87,  192,  253 

Addyston  Pipe  and  Steel  Company  v.  United  States,  175  U.S.  21 1,  78 


Allgeyer  v.  Louisiana,  165  U.S.  578 . 250 

American  Cotton  Oil  Company  v.  Texas,  197  U.S.  115  .  .  288 

Andrews  v.  Andrews,  188  U.S.  32 . 196 

Arthur  v.  Oakes,  63  Fed.  Rep.  310 . 256 

Asbell  v.  Kansas,  209  U.S.  251 . 94 

AspinwalFs  Estate,  In  re,  83  Fed.  Rep.  851  ....  197 

Atkins  v.  Kansas,  191  U.S.  207 . 257 

Atlantic  Coast  Line  v.  Riverside  Mills,  31  S.C.R.  164  .  63,  251 

Attorney  General  v.  Pingree,  113  Mich.  395  ....  236 


Bailey  v.  Alabama,  31  S.C.R.  145  .... 
Bailey  v.  Mayor,  3  Hill  (N.Y.)  433 
Bailey  v.  People,  196  Ill.  28  .... 

Baltimore  and  Ohio  Railroad  Company  v.  Baugh,  149 
368 . 


Bank  v.  Commonwealth,  9  Wallace,  353 

• 

142 

Barker  v.  Barker,  21  Howard,  582  . 

• 

i95 

Barbier  v.  Connolly,  113  U.S.  27 

• 

260 

Barhyte  v.  Shepherd,  35  N.Y.  238  . 

• 

219 

Bates  v.  Guild  Company  v.  Payne,  194  U.S.  107 

• 

219 

Barto  v.  Himrod,  8  N.Y.  483  .... 

• 

224 

Belfast,  The,  7  Wallace,  614  .... 

• 

SI 

Bell’s  Gap  Railroad  Company  v.  Pennsylvania,  134  U.S.  237 

238 

Bernard’s  Township  v.  Stebbins,  109  U.S.  341 

• 

205 

Blair  v.  Cumming  County,  hi  U.S.  363 

• 

303 

Blue  v.  Beach,  155  Ind.  121  . 

• 

217 

Bodley  v.  Gaither,  3  Monroe  (Ky.)  57  . 

• 

354 

Bors  v.  Preston,  in  U.S.  252  .  .  .  . 

• 

iS9 

Boske  v.  Comingore,  177  U.S.  459 . 

Bowman  v.  Chicago  and  Northwestern  Railway  Company,  125 

216 

U.S.  465  ••••••• 

• 

•  • 

93 

U.S 


256 
236 
264 

174,183 


IX 


X 


TABLE  OF  CASES 


PAGES 


Brass  v.  Stoesser,  153  U.S.  391  - . 268,  270 

Brig  James  Gray,  The,  v.  The  Ship  John  Fraser,  21  Howard,  184,  41 

Briggs  v.  French,  2  Sumner,  251 . 206 

Bright  Star,  The,  Woolw.,  266 . 52 

Broderick’s  Will,  21  Wallace,  503 . 197 

Brooklyn  Park  Commissioners  v.  Armstrong,  45  N.Y.  70  .  327 

Brown  v.  Van  Braam,  3  Dallas,  344 . 191 

Budd  v.  New  York,  143  U.S.  517  .  .  .  266,  268,  270,  272 

Burgess  v.  Seligman,  107  U.S.  20 . 175 

Burlington  v.  Beasley,  114  U.S.  310 . 303 

Burrus,  In  re,  136  U.S.  586  .......  196 

Butler  v.  Boston  Steamship  Company,  130  U.S.  527  .  52,  181 

Buttfield  v.  Stranahan,  192  U.S.  470  .  .  .  80,  216,  219 

Byers  v.  McCauley,  149  U.S.  608 . 200 

Byrnes  v.  Douglas,  27  C.C.A.  399 . 323 

Cagwin  v.  Town  of  Hancock,  84  N.Y.  532  .  .  .  .  177 

Calhoun  v.  Millard,  121  N.Y.  59 . 178 


California  v.  Central  Pacific  Railroad  Company,  127  U.S.  1  72,  112 

Camfield  v.  United  States,  107  U.S.  518 . 240 

Cary  v.  Curtis,  3  Howard,  236 . 171,  347 

Central  Pacific  Railroad  Company  v.  California,  162  U.S.  91  113 

Champion  v.  Ames,  188  U.S.  321  .  .  .  80,  83,  88,  143,  192 

Cherokee  Nation  v.  Southern  Kansas  Railway  Company,  135 

U.S.  641 . 72 

Chisholm  v.  Georgia,  2  Dallas,  419 . 358 

Cilley,  In  re,  58  Fed.  Rep.  977 . 197 

Cincinnati,  New  Orleans  and  Texas  Pacific  Railway  Com¬ 
pany  v.  Interstate  Commerce  Commission,  162  U.S.  184  59,  66 
City  of  Knoxville  v.  Knoxville  Water  Company,  212  U.S.  1  272 

City  of  Rochester,  Matter  of  the,  127  N.Y.  243  .  .  .  327 

City  of  Salem,  The,  38  Fed.  Rep.  762 . 43 

City  of  St.  Louis  v.  Western  Union  Telegraph  Company,  149 

U.S.  465 . 229 

Clark  v.  Bever,  139  U.S.  96 . 199 

Clark  v.  Nash,  198  U.S.  361 . 322 

Cleveland,  etc.,  Railway  Company  v.  Illinois,  177  U.S.  514  265 

Cohens  v.  Virginia,  6  Wheaton,  264 . 159 

Commerce,  The,  1  Black,  574 . 51 


TABLE  OF  CASES 


XI 


see  United  States  v.  Delaware  and 


PAGES 

Hudson 


Commodities  Case 
Company 

Commonwealth  v.  Byrne,  20  Grattan,  165 
Commonwealth  v.  Walton,  182  Pa.  St.  373 
Connolly  v.  Union  Sewer  Pipe  Company,  184  U.S.  540  . 
Consolidated  Gas  Company  v.  Willcox,  212  U.S.  19 
Consolidated  Rendering  Company  v.  Vermont,  207  U.S.  541 
Continental  Wall  Paper  Company  v.  Voight,  212  U.S.  227 
Cook  County  National  Bank  v.  United  States,  107  U.S.  445 

Cooley  v.  Board,  12  Howard,  299 . 

Cotting  v.  Kansas  City  Stockyards  Company,  183  U.S.  79 
Cotton  v.  Mississippi  &  Boom  Company,  22  Minn.  372  . 

County  of  Santa  Clara  v.  Southern  Pacific  Railroad  Company, 

18  Fed.  Rep.  385 . 277 

Covington,  etc.,  Turnpike  Company  v.  Sandford,  164  U.S.  574 
Craft  v.  McConaughy,  79  Ill.  346  . 

Craig  v.  Andes,  93  N.Y.  405  . 

Craigie  v.  McArthur,  4  Dillon,  474 
Crossman  v.  Lurman,  192  U.S.  189 
Cruikshank  v.  United  States,  92  U.S.  542 


Daniel  Ball,  The,  10  Wallace,  557  . 

Davis  v.  Elmira  Savings  Bank,  161  U.S.  275  . 

Debs,  In  re ,  158  U.S.  564  .... 

Delaware,  The,  161  U.S.  459 
Detroit  v.  Detroit  Citizens  Street  Railway  Company 
368  ........ 

Detroit  v.  Osborne,  135  U.S.  492 
Distilling  and  Cattle  Feeding  Company  v.  People, 
Dixon  County  v.  Field,  hi  U.S.  92 
Downes  v.  Bid  well,  182  U.S.  244 
Dreyer  v.  Illinois,  187  U.S.  71  . 

Duncan,  In  re,  139  U.S.  445  .... 


Eakin  v.  Raub,  12  Serg.  &  Rawle,  330  . 

Easton  v.  Iowa,  188  U.S.  220  . 

Ellis  v.  Davis,  109  U.S.  485  .... 

Ellis  Vj  United  States,  206  U.S.  246 
El  Paso  Northeastern  Railway  Company  v.  Guitierez,  215 
U.S..,  87 . 


.  221 

3  00 
.  78,288 

3  00 
213 
78,  286 
140 

•  37,  4i 
268,  270 
320 


273 

284 

177 

197 

94 

200 


40,  43,  44,  67 
138 
114,  255 
45 

,  184  U.S. 

274 
200 
284 
179 
34 

213,  222 
225 


56  Ill.  448 


339 

137 

197 

257 

251 


Xll 


TABLE  OF  CASES 


PAGES 

Embury  v.  Conner,  3  N.Y.  51 1 . 328 

Employers’  Liability  Cases,  207  U.S.  463  .  47,  54,61,  65,  115, 

139,  191,  251,  253 

Equitable  Trust  Company  v.  Fowler,  141  U.S.  384  .  .  175 

Erkenbrach  v.  Erkenbrach,  96  N.Y.  456  ....  197 

Escanaba  Company  v.  Chicago,  107  U.S.  678  ...  40 

Eureka  Basin  and  Manufacturing  Company,  Matter  of,  96 

N.Y.  42  . 320 

Fallbrook  Irrigation  District  v.  Bradley,  164  U.S.  112  .  294,  322 
Farmers’  National  Bank  v.  Deering,  91  U.S. 29  .  .  101,  112 

Fischer  v.  St.  Louis,  194  U.S.  61 . 263 

Fiske,  Ex  parte,  113  U.S.  713 . 171 

Fletcher  v.  Peck,  6  Cranch,  87 . 338 

Flint  v.  Stone  Tracy  Company,  Oct.  Term  U.S.  Sup.  Ct.  278 

Floyd  Acceptances,  The,  7  Wallace,  666  ....  165 

Foley,  In  re,  76  Fed.  Rep.  390 . 197 

Foley  v.  Hartley,  72  Fed.  Rep.  570 . 197 

Fontaine  v.  Beers,  19  Ala.  722 . 48 

Fouvergue  v.  Municipality,  18  Howard,  470  ....  197 

Fox  v.  McDonald,  101  Ala.,  51 . 215 

Francis  Wright,  The,  106  U.S.  381 . 347 

French  v.  Barber  Asphalt  Company,  181  U.S.  324  .  .  .  280 

Frisbie  v.  United  States,  157  U.S.  160 . 31 1 


Gaines  v.  Fuentes,  92  U.S.  10 . 198 

Garnett,  In  re,  141  U.S.  1  .  .  .  .40,  44,  45,  52,  156,  181 

Genesee  Chief  v.  Fitzhugh,  12  Howard,  443  .  .  .  39,  154 

Gibbons  v.  Ogden,  9  Wheaton,  1 . 36,  41,  47 

Gordon  v.  United  States,  2  Wallace,  561,  117  U.S.  697  .  .  337 

Green  v.  Biddle,  8  Wheaton,  1 . 354 

Grenada  Lumber  Company  v.  Mississippi,  217  U.S.  433  .  288 

Guden,  In  the  matter  of,  171  N.Y.  529 . 349 

Gunnison  County  v.  Rollins,  173  U.S.  255  .  .  .  .178 

Haddock  v.  Haddock,  201  U.S.  575 . 196 

Hamilton,  The,  207  U.S.  398 . 155 

Hammond  Packing  Company  v.  Arkansas,  212  U.S.  322  130,  289 

Hand  Gold  Mining  Company  v.  Parker,  59  Ga.  419  .  .  321 

Hannibal,  etc.,  Railroad  Company  v.  Iiusen,  95  U.S.  465  .  93 


TABLE  OF  CASES 


Xlll 


PAGES 

Hans  v.  Louisiana,  134  U.S.  1  .....  158,  358 

Haracovic  v.  Standard  Oil  Company,  105  Fed.  Rep.  785  .  206 

Harman  v.  Chicago,  147  U.S.  396 . 41 

Hayes  v.  Pratt,  147  U.S.  557 . 199 

Head  v.  Amoskeag  Manufacturing  Company,  113  U.S.  9  319,  321 

Health  Department  of  the  City  of  New  York  v.  Trinity  Church, 

145  N.Y.  32 . 261 

Healy  Lumber  Company  v.  Morris,  33  Wash.  490  .  .  .320 

Henderson  v.  Mayor,  92  U.S.  259 . 37 

Hennington  v.  Georgia,  163  U.S.  299 . 265 

Hepburn  v.  Griswold,  8  Wallace,  603 . 346 

Hess  v.  White,  9  Utah,  61 . 355 

Heyburn’s  Case,  2  Dallas,  409 . 337 

Hine,  The,  v.  Trevor,  4  Wallace,  555  ....  39,  155 

Hipolite  Egg  Company  v.  United  States,  U.S.  Sup.  Ct,  Oct. 

Term,  1910 . 83 

Holden  v.  Hardy,  169  U.S.  366 . 243,  245 

Home  Insurance  Company  v.  New  York,  134  U.S.  194  .  .  276 

Home  Telephone  Company  v.  Los  Angeles,  21 1  U.S.  265  226,  234, 


274,  330 

Hooper  v.  California,  155  U.S.  648 . 65 

House,  In  re,  46  Pac.  (Col.)  117 . 298,  305 

Houston  v.  Williams,  13  Cal.  24 . 355 

Hurtado  v.  California,  no  U.S.  516 . 222 

Hyde  v.  Southern  Railway  Company,  31  App.  D.C.  466  .  250 


Illinois  Central  Railway  Company  v.  Illinois,  163  U.S.  142  .  329 

Independent  School  District  of  Sioux  City  v.  Rew,  in  Fed. 

Rep.  1 . 179 

Indiana  v.  United  States,  148  U.S.  148  ....  72,  235 

Insurance  Company  v.  Dunham,  11  Wallace,  1  65 

International  Text  Book  Company  v.  Pigg,  217  U.S.  91  .  66 

Interstate  Commerce  Commission  v.  Brimson,  154  U.S.  447  59 

Interstate  Commerce  Commission  v.  Chicago  and  Alton  Rail¬ 
road,  215  U.S.  479 . 64 

Interstate  Commerce  Commission  v.  Illinois  Central  Railroad 

Company,  215  U.S.  452 . 64 

Interstate,  etc.,  Railway  Company  v.  Commonwealth,  207 
U.S.  79  ........ 

Ives  v.  South  Buffalo  Railway  Company,  201  N.Y.  271  . 


325 

253 


XIV 


TABLE  OF  CASES 


PAGES 


Jackson,  Ex  parte ,  96  U.S.  727 . 83,  201 

Jacksonville  Electric  Light  Company  v.  Jacksonville,  36 


Fla.  229  . 

•  • 

236 

Jacobs,  In  re ,  98  N.Y.  98  ... 

»  • 

244,  248 

Jenkins  v.  Andover,  103  Mass.  94  . 

•  • 

304 

J.  E.  Rumbell,  The,  148  U.S.  1 

• 

155 

Johnson  v.  Southern  Pacific  Company,  196  U.S.  1 

.  60,  66, 

251,  265 

Kansas  v.  Colorado,  206  U.S.  46 

165, 

167,  168 

Keller  v.  United  States,  213  U.S.  138 

•  • 

95 

Kentucky  Railroad  Tax  Cases,  115  U.S.  321  . 

•  • 

276 

Kidd  v.  Pearson,  128  U.S.  1 

120,  121, 

122,  123 

Kilbourn  v.  Thompson,  103  U.S.  168 

•  • 

212 

King  v.  Worthington,  104  U.S.  44  .  •  . 

•  • 

1 71 

Knapp,  Stout  &  Co.  v.  McCaffery,  177  U.S.  638 

•  • 

155 

Knowlton  v.  Moore,  178  U.S.  41 

276,  281,  282 

Knoxville  Iron  Company  v.  Harbison,  183  U.S.  13 

• 

250,  258 

Knoxville  Water  Company  v.  Knoxville,  200  U.S. 

22  234, 

272,  330 

Kohl  v.  United  States,  91  U.S.  367 

•  • 

73 

Kollock,  In  re,  165  U.S.  526  .... 

•  • 

216 

Lake  Shore,  etc.,  Railroad  Company  v.  Prentice,  147  U.S.  101  174 

Langenberg  v.  Decker,  131  Indiana,  471 

.  220 

Langford  v.  United  States,  101  U.S.  341 

•  165 

Lawrence  v.  Nelson,  143  U.S.  215  . 

199 

Lawton  v.  Steele,  152  U.S.  133 

.  220 

Legal  Tender  Cases,  The,  12  Wallace,  457 

34b 

Lehigh,  etc.,  Company  v.  Kelley,  160  U.S.  327 

.  205 

Leisy  v.  Hardin,  135  U.S.  100 

•  76,93 

Lem  Moon  Sing  v.  United  States,  158  U.S.  558 

.  218 

Leovv  v.  United  States,  177  U.S.  621 

41,  154 

License  Cases,  The,  5  Howard,  504 

37,  94 

Loan  Association  v.  Topeka,  20  Wallace,  655  . 

293,  298,  302,  307 

Lochner  v.  New  York,  198  U.S.  45 

245,  250 

Loewe  v.  Lawler,  208  U.S.  274 

79, 

125,  255 

Lord  v.  Steamship  Company,  102  U.S.  541 

42,  43 

Lottawanna,  The,  21  Wallace,  558 

.  49,  52,  180 

Lottery  Case,  see  Champion  v.  Ames. 

Lowe  v.  Conroy,  120  Wis.  151 

•  • 

.  219 

Lowell  v.  Boston,  hi  Mass.  454 

•  • 

.  3°i 

TABLE  OF  CASES 


XV 


Lucas  County  v.  State,  75  Ohio  St.  114 
Luther  v.  Borden,  7  Howard,  1 
Luxton  v.  North  River  Bridge  Company 
Lyons  v.  Munson,  99  U.S.  684 


153  U.S.  525 


PAGES 

298,  306 
225,  233 
113 
178 


73,  101,103,110,1 38, 


McArdle,  Ex  parte,  7  Wallace,  506 
McConihay  v.  Wright,  121  U.S.  201 
McCulloch  v.  Maryland,  4  Wheaton,  316 
Mclntire  v.  Wood,  7  Cranch,  504  . 

McLean  v.  Arkansas,  21 1  U.S.  539 
Magoun  v.  Illinois,  etc.,  Bank,  170  U.S.  283 
Mahon,  In  the  Matter  of,  171  N.Y.  263 

Manaca,  In  re,  146  Mich.  697 . 

Marbury  v.  Madison,  1  Cranch,  137  .... 

Martha  Washington,  The,  25  Law  Reporter,  22 
Mayor  v.  Keely  Institute,  81  Md.  106  .... 

Mayor  of  New  York  v.  Miln,  9  Peters,  85 
Metropolitan  Board  of  Health  v.  Heister,  37  N.Y.  661  . 

Miner  v.  Happersett,  21  Wallace,  162  .... 

Minneapolis  v.  Minneapolis  Street  Railway  Company,  215  U.S 

4i7 . 

Missouri  v.  Illinois,  200  U.S.  496 

Missouri  v.  Lewis,  101  U.S.  22 . 223,  297 

Missouri  Pacific  Railway  Company  v.  Larrabee  Flour  Mills 

Company,  211  U.S.  612 . 

Missouri,  etc.,  Railway  Company  v.  Nebraska,  164  U.S.  403  . 

Mitchel  v.  Clark,  no  U.S.  633 . 

Mitchell  v.  Steelman,  8  Cal.  363 . 

Monongahela  Bridge  Company  v.  United  States,  216  U.S.  177 
Monongahela  Navigation  Company  v.  United  States,  148 

U.S.,  312 . 71,  82,  88,  192 

Montague  v.  Lowry,  193  U.S.  38  ...  78,  124,  286 

Moran  v.  New  Orleans,  112  U.S.  69 . 41 

Morgan’s  Steamship  Company  v.  Louisiana  Board  of  Health, 


346 
163 

235,275 
171 
258 
276,  282 
3°  o 
221 

337 
48 
298 

354 
219 

233 


274,  330 
.  168 


98 

320 

259 

48 

219 


118  U.S.  455 

Morris  v.  Columbus,  102  Ga.  792 
Moses  Taylor,  The,  4  Wallace,  41 1 
Mugler  v.  Kansas,  123  U.S.  623 
Muller  v.  Oregon,  208  U.S.  212 
Munn  v.  Illinois,  94  U.S.  113 


41 
215 
154,  158 
.  65,  90 
245 
2 66,  272 


xvi 


TABLE  OF  CASES 


PAGES 


Murray  v.  Chicago  and  Northwestern  Railway  Company,  62 

Fed.  Rep.  24 . 184 

Murray’s  Lessee  v.  Hoboken  Land  and  Improvement  Company, 

18  Howard,  272 . 221 

Myrick  v.  Michigan  Central  Railway  Company,  107  U.S.  102  174 


Nashville,  Chattanooga,  etc.,  Railway  Company  v.  Alabama, 

128  U.S.  96 . 265 


National  Cotton  Oil  Company  v.  Texas,  197  U.S.  115  .  288,  289 

Neagle,  In  re,  135  U.S.  1 . 139 

Nester  v.  The  Continental  Brewing  Company,  161  Pa.  St.  473  284 

Neves  v.  Scott,  13  Howard,  268 . 102,  163 

New  Central  Coal  Company  v.  Granges  Creek  Company,  37 

Md.  537 . 321 

New  Haven,  etc.,  Railroad  Company  v.  Interstate  Commerce 

Commission,  200  U.S.  361 . 81 

New  York,  The,  175  U.S.  187 . 45 

New  York  v.  Miller,  8  Peters,  118 . 354 

New  York  Central  Railroad  Company  v.  Lockwood,  17  Wal¬ 
lace,  357  . 174 

New  York  Central  Railroad  Company  v.  United  States,  212 

U.S.  481  ..........  59 

New  York  Life  Insurance  Company  v.  Cravens,  178  U.S.  389  65 

New  York,  New  Haven  and  Hartford  Railway  Company  v. 

New  York,  165  U.S.  628 . 265 

Noble  State  Bank  v.  Haskell,  31  S.C.R.  186  .  .  .  239,  324 

Norris  v.  Clymer,  2  Pa.  St.  281 . 339 

North  Dakota  v.  Nelson  County,  1  N.D.  88  .  .  .  .  303 

Northern  Securities  Company  v.  United  States,  193  U.S.  197  78,  286 


Oakley  v.  Aspinwall,  3  N.Y.  547 . 355 

Oceanic  Steam  Navigation  Company  v.  Stranahan,  214  U.S.  520  19 

Offield  v.  New  York,  New  Haven  and  Hartford  Railroad,  203 

U.S.  372  ..........  323 

Ohio  v.  Thomas,  173  U.S.  276 . 139 

Olcott  v.  Supervisors,  16  Wallace,  689 . 295 

Olopp  v.  Ely,  27  N.J.L.  (3  Dutch.)  622 . 356 

Opinion  of  the  Justices,  182  Mass.  665 . 236 

Orleans  v.  Platt,  99  U.S.  676 . 178 


TABLE  OF  CASES 


XVII 


PAGES 

Orr  v.  Gilman,  183  U.S.  278 . 276 

Osborn  v.  The  Bank  of  the  United  States,  9  Wheaton,  738  105J 

106,  no,  in,  134,  136 

Oyster  Police  Steamers  of  Maryland,  The,  31  Fed.  Rep.  763  43,  45 


Pacific  Removal  Cases,  115  U.S.  15 
Packet  Company  v.  Catlettsburg,  105  U.S.  559 
Palmer  v.  McMahon,  133  U.S.  660 
Patapsco  Guano  Company  v.  North  Carolina  Board 
culture,  171  U.S.  345 

Patterson  v.  The  Bark  Eudora,  190  U.S.  169 
Patterson  v.  Kentucky,  97  U.S.  501 
Payne  v.  Hook,  7  Wallace,  425 
Peik  v.  Chicago  and  Northwestern  Railway 


U.S.  164 . 

66 

Pell,  Matter  of,  171  N.Y.  48  . 

277 

Pennie  v.  Reis,  182  U.S.  464  .... 

238 

Pennsylvania  v.  Wheeling,  etc.,  Bridge  Company,  18  Howard,  421  42 

People  v.  Chase,  165  Del.  527 

220 

- v.  Chicago  Gas  Trust  Company,  130  Ill.  268 

284 

- v.  Havnor,  149  N.Y.  195 

244 

- v.  Hawkins,  157  N.Y.  1  ... 

.  248 

- v.  Mayor,  4  N.Y.  419  .... 

.  280 

- v.  The  Milk  Exchange,  145  N.Y.  267 

284 

- v.  Ronner,  185  N.Y.  285 

279 

- v.  Sheldon,  139  N.Y.  251 

.  284 

■ - v.  Sours,  31  Col.  369  .... 

.  228 

- ex  rel.  Armstrong  v.  Warden,  183  N.Y.  223 

.  241 

Perkins  v.  Scales,  2  La.,  612  . 

356 

Phipps  v.  Harding,  34  U.S.  Appeals,  148 

175 

Plumley  v.  Massachusetts,  155  U.S.  461 

94 

Powell  v.  Pennsylvania,  127  U.S.  678 

65 

Propeller  Genesee  Chief,  The,  v .  Fitzhugh,  12  Howard,  443 

39,  40,  154 

Pullman  Company  v.  Kansas,  216  U.S.  56 

66 

Rahrer,  In  re ,  140  U.S.  545  .... 

93, 119 

Railroad  Company  v.  Fuller,  17  Wallace,  560  . 

265 

Railway  Company  v.  Minnesota,  134  U.S.  418  . 

.  220 

Rapier,  In  re,  143  U.S.  no 

83,  86,  201 

Raymond  v.  Fish,  51  Conn.  80 

• 

.  219 

112,  137 
4i 
219 

of  Agri- 

95 

43,  44,  45,  49 
94 

1 63,  199 

Company,  94 


xviii  TABLE  OF  CASES 

PAGES 

Reed  v.  Reed,  31  Fed.  Rep.  49 . 197 

Reid  v.  Colorado,  187  U.S.  137 . 95 

Ritchie  v.  State,  155  Ill.  98 . 30 

Ritchie  &  Co.  v.  Wayman,  244  III.  509 . 30 

Robbins  v.  Shelby  County  Taxing  District,  120  U.S.  489  37,  76 

Robertson  v.  Baldwin,  165  U.S.  275  ....  43,  257 

Robert  W.  Parsons,  The,  191  U.S.  17 . 39 

Russell  v.  Southard,  12  Howard,  139 . 195 

Satterlee  v.  Mathewson,  2  Peters,  380 . 213 

Schlemmer  v.  Buffalo,  Rochester,  and  Pittsburg  Railway  Com¬ 
pany,  205  U.S.  1 . 60,  69,  251,  265 

Schollenberger  v.  Pennsylvania,  171  U.S.  1  .  .  .  76,  94 

Scott  v.  Neely,  140  U.S.  106 . 163 

Shaw  v.  McCandless,  36  Miss.  296 . 49 

Shepherd’s  Fold  v.  New  York,  96  N.Y.  137  ....  305 

Sherlock  v.  Ailing,  83  U.S.  99 . 155 

Siebold,  Ex  parte ,  100  U.S.  371 . 139 

Simmons  v.  The  Jefferson,  215  U.S.  130  ....  39 

Sinking  Fund  Cases,  The,  99  U.S.  700  ....  29,  267 

Smiley  v.  Kansas,  196  U.S.  447 . 2S8 

Smith  v.  Alabama,  124  U.S.  465 . 183 

- v.  Salt  Lake  City  Railroad  Company,  13  Utah,  33  .  355 

Smyth  v.  Ames,  169  U.S.,  466 . 272,  330 

Snyder  v.  Marks,  109  U.S.  189 . 171 

Soon  Hing  v.  Crowley,  113  U.S.  703 . 246 

South  Carolina  v.  United  States,  199  U.S.  437  .  .  .  233 

Southern  Pacific  Company  v.  Denton,  146  U.S.  202  .  .  171 

Spokane  v.  Wacha,  51  Wash.  323 . 241 

Spreckles  Sugar  Refining  Company  v.  McClain,  192  U.S.  397  278 

Spring  Valley  Waterworks  Company  v.  Schattler,  no  U.S.  347  268 

Springer  v.  United  States,  102  U.S.  586  ....  278 

Standard  Oil  Company  v.  Kentucky,  217  U.S.  413  .  .  288 

Starne  v.  People,  222  Ill.  189 . 204 

State  v.  Central  Lumber  Company,  123  N.W.  Rep.  (S.  D.)504  271 

- v.  Drayton,  82  Neb.  254 . 270 

- v.  Farkner,  94  Iowa,  1 . 224 

- v.  Hubbard,  65  Ohio  St.  574  . . 237 

- v.  Osawkee  Township,  14  Kan.  418  .  .  .  .  302 

- v.  Standard  Oil  Company,  49  Ohio  St.  137  .  .  .  284 


TABLE  OF  CASES 


XIX 


PAGES 

State  v.  Switzler,  143  Nev.  287 . 283,  306 

- v.  Ziegenheim,  144  Mo.  283 . 300 

State  Tonnage  Tax  Cases,  The,  12  Wallace,  204  ...  42 

Steamboat  Magnolia,  The,  20  Howard,  296  ...  39,  154 

- Orleans,  The,  v.  Phoebus,  n  Peters,  175  ...  39 

- Sunswick,  The,  6  Benedict,  112 . 42,50 

Steamboat  Company  v.  Livingston,  3  Cowen,  713  .  .  .  42,  48 

Stone  v.  Farmer’s  Loan  and  Trust  Company,  116  U.S.  307  .  273 

Strickland  v.  Highland  Bay  Mining  Company,  200  U.S.  527  .  322 

Sun  Printing  Association  v.  Rapid  Transit  Commissioners, 

152  N.Y.  257  . 236 

Swift  v.  Lyson,  16  Peters,  1 . 172,  183 

Swift  &  Co.  v.  United  States,  196  U.S.  375  .  .  .78,  85,  124 


Tarble’s  Case,  13  Wallace,  397 . 

Taylor  v.  Beckham,  178  U.S.  548 . 

Tenement  House  Department  v.  Moeschen,  179  N.Y.  325 

Tennesee  v.  Davis,  100  U.S.  257 . 

Terry  v.  Anderson,  95  U.S.  628 . 

Texas  v.  White,  7  Wallace,  700 . 

Thomas  Jefferson,  The,  10  Wheaton,  428 

Town  of  Venice  v.  Murdock,  92  U.S.  494 

Tullis  v.  Lake  Erie,  etc.,  Railway  Company,  175  U.S.  348 

Turner  v.  Nye,  154  Mass.  579 . 


139 
225 
261, 264 


139 
259 
225,  233 
39,  48,  154 
176,  177 
251 
321 


Ughebanks  v.  Armstrong,  208  U.S.  481  .  .  .  213,  222 

Union  Bridge  v.  United  States,  204  U.S.  364  ....  219 

United  States  v.  Adair,  208  U.S.  161  .  .  .82,  87,  192,  253 

- v.  Bevans,  3  Wheaton,  336 . 150,  156 

- V.  Burlington  and  Henderson  County  Ferry  Company, 

21  Fed.  Rep.  331 . 42,  50,  52 

-  v.  Colorado  and  Northwestern  Railway  Company,  85 

C.  C.  A.  27  .•••••»•»  69 

- v.  Coombs,  12  Peters,  72 . 45,  49 

- v.  Delaware  and  Hudson  Canal  Company,  213  N.S.  366  80 

84,  144 

- v.  E.C.  Knight  Company,  156  U.S.  .  .  65,  77,  123,  126 

- v.  Ferreira,  13  Howard,  52 . 337 

- v.  Geddes,  65  C.  C.  A.  320 . 69 

- v.  Gettysburg  Electric  Railway  Company,  160  U.S.  668  .  _  73 


XX 


TABLE  OF  CASES 


PAGES 

United  States  v.  Joint  Traffic  Association,  171  U.S.  505  .  77,  285 

- v.  Ju  Toy,  198  U.S.  253 . 218 

- v.  Ortega,  n  Wheaton,  407 . 163 

- v.  Peters,  5  Cranch,  115 . 338 

- v.  Realty  Company,  163  U.S.  427  j . 312 

- v.  Rio  Grande  Dam  and  Irrigation  Company,  174  U.S.  690  41 

- v.  Teller,  107  U.S.  621 . 311 

- v.  Trans-Missouri  Freight  Association,  166  U.S.  290  77,  285 

- v.  The  William,  2  Amer.  Law  Journal,  255  ...  42 

- v.  Yale  Todd,  13  Howard,  52  (note)  .  .  .  .  337 

Van  Orden,  Ex  parte,  3  Blatchford,  166  .  .  .  .171 

Vaughn  v.  Hark,  49  Ark.  160 . 355 

Veazie  Bank  v.  Fenno,  8  Wallace,  533 . 275 

Vicksburg  v.  Vicksburg  Water  Company,  202  U.S.  453  .  .  234 

Village  of  Saratoga  Springs  v.  Saratoga  Springs  Gas  Com¬ 
pany,  191  N.Y.  123 . 216 

Wabash,  St.  Louis  and  Pacific  Railway  Company  v.  Illinois, 

118  U.S.  557 . 66 

Waite  v.  Santa  Cruz,  184  U.S.  302  ....  179,  201 

Walker  v.  Cincinnati,  21  Ohio  St.  14 . 236 

Walla  Walla  v.  Walla  Walla  Water  Company,  172  U.S.  1  .  234 

Walton  v.  Cotton,  19  Howard,  355 . 311 

Waters  Pierce  Company  v.  Texas,  212  U.S.  86  287 

Watson  v.  Tarpley,  18  Howard,  517 . 175 

Wayman  v.  Southard,  10  Wheaton,  1  .  .  .  .  151,152 


Welch  v.  Swazey,  214  U.S.  1 . 260,  262,  296 

Western  Savings  Fund  Society  v.  Philadelphia,  31  Pa.  St.  175  236 

Western  Union  Telegraph  Company  v.  Call  Publishing  Com¬ 


pany,  181  U.S.  92 . 184 

- v.  Kansas,  216  U.S.  1  ....  66,  141,  329 

Weston  v.  Charleston,  2  Peters,  449 . 138 

White  v.  Inebriates’  Home,  141  N.Y.  123  .  .  .  298,  305 

White’s  Bank  v.  Smith,  7  Wallace,  646 . 48 

Whitford  v.  Clark  Company,  119  U.S.  522  ....  171 

Willcox  v.  Consolidated  Gas  Company,  212  U.S.  19  .  .  272 

William  Deering  Company  v.  Peterson,  75  Min.  118  .  .  302 

Wilson  v.  Eureka  City,  173  U.S.  32 . 263 

- v.  Shaw,  204  U.S.  24 . 73,  235,  312 


TABLE  OF  CASES 


XXI 


PAGES 

Winkler  v.  Philadelphia  and  Reading  Railway  Company, 

4  Pennewill  (Del.),  80 . 70 

Wisconsin  v.  Duluth,  96  U.S.  379 . 44 

Wisconsin  Keely  Institute  Company  v.  Milwaukee  County, 

95  Wis.  153 . 298,  305 

Wold  v.  Franz,  58  Fed.  Rep.  680 . 197 

Wurts  v.  Hoagland,  114  U.S.  606 . 296 

Young,  Ex  parte,  209  U.S.  123 . 289 


SOCIAL  REFORM  AND  THE 
CONSTITUTION 


CHAPTER  I 

THE  DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM 

I.  Introduction 

The  tremendous  changes  in  political  and  social  con¬ 
ditions  due  to  the  adoption  of  improved  means  of 
transportation  and  to  the  establishment  of  the  factory 
system  have  brought  with  them  problems  whose  solu¬ 
tion  seems  to  be  impossible  under  the  principles  of  law 
which  were  regarded  as  both  axiomatic  and  perma¬ 
nently  enduring  at  the  end  of  the  eighteenth  century. 
That  law  was  permeated  by  the  theories  of  social  com¬ 
pact  and  natural  right,  which  in  their  turn  were  based 
upon  the  conception  that  society  was  static  rather 
than  dynamic  or  progressive  in  character  —  that 
there  was,  in  other  words,  a  social  state  which  under  all 
conditions  and  at  all  times  was  absolutely  ideal.  The 
various  utopias  which  had  been  outlined  by  political 
theorists  and  philosophical  dreamers  had  held  before 
men’s  minds  a  goal  unto  which  man  should  strive  to 
attain.  An  ideal  state  was  pictured  in  which,  if  it 
were  once  reached,  humanity  should  cease  from  striv¬ 
ing  and,  finally  at  rest,  should  contemplate  with  com- 

B 


i 


2  [SOCIAL  REFORM  AND  THE  CONSTITUTION 

placency  the  hardships  of  the  past  and  anticipate  with 
satisfaction  the  joys  of  the  future. 

Under  the  influence  of  this  static  conception  of  so¬ 
ciety  political  philosophers  at  first  and  lawgivers 
later  accepted  as  a  fundamental  political  theory  the 
idea  that  the  state  was  based  upon  a  compact  entered 
into  between  governors  and  governed,  the  details  of 
which  were,  it  is  true,  not  defined,  and  the  time  of 
signing  and  sealing  which  was  not  exactly  stated.  The 
governed  —  ix.  the  mass  of  mankind  —  were  con¬ 
sidered  to  have  reserved  at  the  time  of  making  this 
compact,  certain  rights  which  were  spoken  of  as  natural 
rights  and  of  which  they  might  not  be  deprived  by 
their  governors.  Finally,  as  these  rights  were  con¬ 
ceived  of  as  natural,  they  were  thought  to  be  possessed 
by  man  because  of  the  fact  of  his  humanity.  All 
men  were  brothers  in  the  same  human  family  and  were 
entitled  to  share  equally  in  the  advantages  of  brother¬ 
hood. 

That  these  ideas  had  great  effect  in  bettering  the 
conditions  of  the  western  European  world  may  not  be 
denied.  That  they  were  true  in  fact  is,  however, 
certainly  susceptible  of  contradiction,  and  that  under 
present  conditions  they  are  working  harm  rather  than 
good  is  believed  by  many.  Prior  to  the  eighteenth 
century  no  political  system  had  been  as  a  matter  of 
fact  based  on  any  such  compact.  The  nearest  ap¬ 
proach  to  such  a  contractual  basis  of  society  was  to  be 
found  in  feudalism.  Under  its  influence  a  law  was 
developed  which  appeared  to  recognize  reciprocal  ob¬ 
ligations  and  rights  upon  the  part  of  lord  and  vassal. 
But,  notwithstanding  such  contract  —  if  contract  it 
can  be  called  —  and  indeed,  largely  through  its  breach, 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  3 


the  political  system  changed  from  feudalism  first  into 
the  absolute  and  then  into  the  constitutional  monarchy 
or  the  aristocratic  or  democratic  republic. 

The  basis  of  political  society  was  later  seen  to  be,  as 
it  probably  always  was,  historical  development  rather 
than  contract,  and  all  attempts  to  place  society  on  a 
contractual  basis  have  come  to  be  believed  as  worse 
than  useless  in  that  they  retard  development  by 
tending  to  force  it  along  artificial  lines  rather  than 
along  lines  which  are  natural  and  therefore  those 
of  least  resistance. 

This  conception  of  political  society  as  a  historical  de¬ 
velopment  was,  however,  only  dimly  seen,  if  seen  at  all, 
prior  to  the  formulation  of  the  evolutionary  theory  of 
development  in  the  world  of  science.  Once,  however, 
that  theory  was  accepted,  political  writers  began  to 
apply  it  to  the  problems  of  social  life ;  and  at  the  pres¬ 
ent  time  thoughtful  men  are  coming  more  and  more 
to  the  conviction  that  a  static  society  is  all  but  impos¬ 
sible  and  that  absolute  political  ideals  are  incapable  of 
realization.  More  and  more  political  and  social  stu¬ 
dents  are  recognizing  that  a  policy  of  opportunism  is 
the  policy  most  likely  to  be  followed  by  desirable  re¬ 
sults  and  that  adherence  to  general  theories  which  are 
to  be  applied  at  all  times  and  under  all  conditions  is 
productive  of  harm  rather  than  good.  This  feeling, 
which  has  influenced  philosophy  through  the  writings 
of  the  pragmatic  school,  has  been  strengthened  by  the 
theory  of  the  economic  interpretation  of  history  which 
of  recent  years  has  been  received  with  so  much  favor. 

One  may,  therefore,  without  committing  himself  to 
all  the  vagaries  of  pragmatic  philosophy,  and  without 
admitting  all  the  claims  of  the  believers  in  the  eco- 


4 


SOCIAL  REFORM  AND  THE  CONSTITUTION 


nomic  interpretation  of  history,  safely  say,  that  at  the 
present  time  most  students  regard  the  postulation  of 
fundamental  political  principles  of  universal  applica¬ 
tion  as  the  statement  of  “mere  useless  opprobrious 
theory.”  1  In  fact,  most  American  lawyers  regard 
even  the  two  great  theories  of  social  compact  and 
natural  rights  as  of  themselves  inapplicable  as  legal 
principles  and  as  having  the  force  of  law  only  in  so 
far  as  they  have  been  incorporated  into  constitutions 
and  bills  of  rights. 

At  the  same  time,  however,  both  of  these  theories 
which  were  formulated  in  the  eighteenth  century  have, 
as  a  matter  of  fact,  been  made  the  basis  of  the  Ameri¬ 
can  constitutional  system,  which  dates  from  the  same 
time.  The  courts  of  this  country,  further,  are  per¬ 
mitted  to  declare  unconstitutional  acts  of  the  legis¬ 
lature,  on  the  one  hand  attempting  to  change  the 
character  of  our  political  structure  which  is  regarded 
as  fixed  in  the  social  compact,  or,  on  the  other  hand, 
violating  any  of  the  rights  of  the  individual  guaran¬ 
teed  to  him  by  the  bills  of  rights  in  which  are  formu¬ 
lated  the  natural  rights  of  man.  Inasmuch,  therefore, 
as  the  constitution  of  the  United  States  is,  on  account 
of  the  complicated  procedure  and  the  large  majorities 
required,  very  difficult,  if  not  impossible,  of  amend¬ 
ment  under  ordinary  conditions,  it  must  be  confessed 
that  Americans  are  in  many  respects  living  under  a 
political  system  which  has  been  framed  upon  the 
theory  that  society  is  static  rather  than  dynamic,  and 
that  the  rights,  which  individuals  perhaps  properly 

1  As  Governor  Pownall  once  said  of  certain  plans  proposed  for  the 
regulation  of  the  relations  of  Great  Britain  with  her  North  American 
colonies. 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  5 


possessed  in  the  eighteenth  century,  are  the  rights 
which  they  should  properly  possess  at  the  beginning 
of  the  twentieth  century,  although  present  social  and 
economic  conditions  are  quite  different  from  what 
they  once  were.1 

Attempts  so  to  change  the  structure  of  our  politi¬ 
cal  system  and  so  to  modify  the  content  of  private 
rights  as  to  bring  them  into  conformity  with  modern 
conditions  are  thus  apt  to  meet  with  failure  unless 
the  courts,  upon  which  devolves  the  duty  of  examin¬ 
ing  such  attempts  from  the  viewpoint  of  their  con¬ 
stitutional  propriety,  recognize  that  legislative  bodies 
possess  wide  discretion  under  the  constitution,  and 
unless  they  determine  to  treat  the  constitution  some¬ 
what  differently  from  an  ordinary  statute  and  to 
apply  to  its  interpretation  less  strictly  than  to  other 
branches  of  the  law  the  doctrine  of  stare  decisis. 

It  is  the  purpose  of  the  following  pages  to  state  in 
the  first  place  what  is  the  program  of  political  and 
social  reform  proposed  by  most  modern  progressive 
countries  which  have  been  called  upon  to  solve  the 
problems  the  American  people  will  soon  be  called 
upon  to  solve ;  in  the  second  place,  to  inquire  what  is 
the  attitude  of  American  courts  towards  the  concrete 
measures  contained  in  such  a  program,  and  finally  to 


1  “Dicey  says  of  amending  the  constitution  of  the  United  States: 
‘The  sovereign  of  the  United  States  has  been  roused  to  serious  action 
but  once  during  the  course  of  ninety  years.  It  needed  the  thunder  of 
the  civil  war  to  break  his  repose,  and  it  may  be  doubted  whether 
anything  short  of  impending  revolution  will  ever  again  rouse  him 
to  activity.  But  a  monarch  who  slumbers  for  years  is  like  a  mon¬ 
arch  who  does  not  exist.  A  federal  constitution  is  capable  of  change, 
but  for  all  that  a  federal  constitution  is  apt  to  be  unchangeable.’” 
—  Thayer,  “  Legal  Essays,”  p.  33,  note. 


6  SOCIAL  REFORM  AND  THE  CONSTITUTION 


consider  what  methods  there  are  by  which  pressure 
may  be  brought  to  bear  upon  the  courts  to  induce 
them  either  to  abandon  or  not  to  adopt  the  concep¬ 
tion  that  our  constitutions  postulate  a  fixed  and  un¬ 
changeable  political  system  and  a  rigid  and  inflexible 
rule  of  private  right,  and  to  apply  the  rule  that  con¬ 
stitutions,  which  are  practically  unamendable,  should 
be  considered  rather  as  statements  of  general  principles 
whose  detailed  application  should  take  account  of 
changing  conditions,  and  should  be  so  interpreted  by 
judicial  decision  as  to  be  susceptible  of  a  continuous 
and  uninterrupted  development. 

II.  The  Political  Problems  oe  the  United 

States 

The  industrial  revolution  by  which  the  last  century 
and  a  half  has  been  characterized  has  had  certain 
well-defined  effects  noticeable  in  a  more  or  less  marked 
degree  in  all  countries  subjected  to  its  influence.  In 
such  countries  as  England  and  Germany,  which  have 
been  particularly  devoted  to  industry,  the  effects  of 
this  industrial  revolution  have  been  naturally  more 
general  and  more  pronounced  than  in  such  countries 
as  the  United  States  and  Russia,  which  have  until 
quite  recently  been  almost  exclusively  devoted  to 
agricultural  or  even  pastoral  pursuits.  But  in  almost 
all  countries,  social  conditions  are  very  different  from 
what  they  were  before  the  improvement  in  transpor¬ 
tation,  which  is  perhaps  the  most  salient  characteristic 
of  the  present  age  as  compared  with  the  ages  which 
have  preceded  it. 

Power  machinery  and  steam  transportation  by  both 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  7 


land  and  water  have  at  the  same  time  so  changed 
productive  processes  and  so  enlarged  commercial 
markets  that  particular  countries,  like  Great  Britain, 
have  found  it  to  their  apparent  advantage  to  devote 
themselves  almost  exclusively  to  the  pursuit  of  com¬ 
merce  and  industry,  while  in  almost  all  highly 
developed  countries  which  have  been  subjected  to  the 
influence  of  western  European  civilization,  classes  of 
industrial  workers  have  arisen  which  in  numbers  and 
in  minute  differentiation  of  occupation  surpass  any¬ 
thing  which  the  world’s  history  has  hitherto  exhibited. 
Improved  methods  of  transportation,  further,  have  of 
themselves  so  facilitated  the  intercourse  between  dif¬ 
ferent  countries  and  between  what  were  once  widely 
separated  portions  of  the  earth’s  surface  that  in  many 
instances  natural  obstacles  to  communication  have, 
comparatively  speaking,  ceased  to  exist,  and  arbitrary 
political  boundaries  have  from  the  viewpoint  of  the 
economic  life  of  man  lost  much  of  their  significance. 

In  other  words,  classes  have  developed  whose  posi¬ 
tion  in  the  state  cannot  be  defined  in  accordance  with 
the  rubrics  of  a  once  almost  universal  legal  lore,  and 
political  centralization  is  necessary  if  political  systems 
are  to  be  in  accord  with  recognized  economic  facts. 
Just  as  local  law  once  gave  way  to  national  law,  and 
the  privilege  of  the  baron  fell  before  the  rights  of  the 
merchant,  so  at  the  present  time  a  political  organiza¬ 
tion  based  on  more  or  less  local  isolation  is  being 
forced  to  succumb  to  the  needs  of  an  economic  system 
based  upon  more  general  intercommunication,  and 
the  rights  of  labor  are  being  emphasized  at  the  expense 
of  the  position  of  the  employer. 

The  regulation  of  the  conditions  of  the  vast  and 


8  SOCIAL  REFORM  AND  THE  CONSTITUTION 


minutely  differentiated  classes  of  industrial  workers, 
many  of  whom  are  women  and  children,  of  itself 
presents  problems  most  difficult  of  solution  in  coun¬ 
tries  whose  political  system  has  been  brought  into 
accord  with  economic  facts.  But  in  countries,  like 
the  United  States,  whose  political  system  was  framed 
in  the  latter  part  of  the  eighteenth  century,  the  diffi¬ 
culty  of  solving  these  problems  is  vastly  increased. 
For  attempts  at  regulation  are  met  by  the  contention 
that  the  authority  which  is  making  the  attempts  is, 
in  the  existing  political  system,  devoid  of  jurisdiction. 

The  difficulties  attendant  upon  the  solution  of  social 
problems  in  political  conditions  such  as  exist  in  the 
United  States  are  not,  however,  confined  to  the  regu¬ 
lation  of  labor.  They  appear  as  well  whenever  the 
attempt  is  made  to  regulate  methods  of  transporta¬ 
tion,  production,  and  distribution.  Therefore,  while 
in  the  United  States  the  labor  problem  presses  for 
solution  with  as  great  insistence  as  in  other  industrial 
countries,  the  political  problem  is  of  even  greater  im¬ 
portance,  since  upon  its  satisfactory  solution  depends 
the  solution  of  almost  all  the  other  problems  which 
present  themselves.  On  that  account  our  attention 
will  be  first  directed  to  the  political  problems  which 
have  arisen  as  a  result  of  the  change  in  American 
economic  conditions  to  which  allusion  has  been  made. 

It  is  a  well-known  fact  that  when  the  constitution 
of  the  United  States  was  adopted,  there  were  lying 
along  the  Atlantic  seaboard  of  North  America  a  num¬ 
ber  of  communities  largely  engaged  in  agricultural 
pursuits  and  occupying  sparsely  populated  districts 
which,  as  compared  with  their  population,  were  richly 
endowed  with  natural  resources.  These  communities 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  g 


were  connected  with  each  other  only  by  the  sea  and 
by  the  rivers  and  estuaries  which  in  many  instances 
penetrated  far  into  the  interior  of  the  country.  The 
social  conditions  in  these  communities  were  as  diverse 
as  their  geographical  situation  was  isolated.  In  some, 
slave  labor  was  predominant;  in  others,  free  labor  was 
the  rule.  In  some,  one  racial  element  or  one  religious 
confession  was  most  pronounced ;  in  others,  another. 
Their  comparative  geographical  isolation,  and  their 
difference  in  economic  and  social  conditions,  naturally 
had  the  effect  of  causing  the  states,  as  these  communi¬ 
ties  came  to  be  called,  to  regard  the  maintenance  of  a 
large  degree  of  local  independence  as  of  the  greatest 
importance.  Under  the  influence  of  these  considera¬ 
tions  a  constitution  was  adopted  which,  while  recog¬ 
nizing  that  the  states  had  certain  common  interests, 
is  now  commonly  believed  to  have  laid  its  emphasis 
upon  the  necessity  of  preserving  for  all  time  the  same 
degree  of  state  sovereignty  and  independence  as  was 
recognized  to  exist  in  the  latter  part  of  the  eighteenth 
century.  For  that  constitution  attempted  to  secure 
to  each  of  the  states  of  the  Union  equal  representation 
in  the  upper  house  of  the  legislature  then  established, 
of  which  no  state  could  be  deprived  without  its  con¬ 
sent,  and  provided  that  no  state  should  be  divided 
nor  united  to  another  state  against  its  will;  while 
special  care  was  taken  to  secure  the  recognition  of  the 
fact  that  the  new  government  was  one  only  of  enu¬ 
merated  powers,  and  that  powers  not  granted  to  such 
government  were  reserved  to  the  states  or  to  the 
people. 

For  one  reason  or  another  the  people  of  the  United 
States  came  soon  to  regard  with  an  almost  super- 


IO  SOCIAL  REFORM  AND  THE  CONSTITUTION 


stitious  reverence  the  document  into  which  this 
general  scheme  of  government  was  incorporated,  and 
many  considered,  and  even  now  consider,  that  scheme, 
as  they  conceive  it,  to  be  the  last  word  which  can  be 
said  as  to  the  proper  form  of  government  —  a  form 
believed  to  be  suited  to  all  times  and  conditions. 
The  improvement  in  the  means  of  communication 
between  the  states  of  the  Union  through  the  digging 
of  waterways  and  the  building  of  railways  has,  how¬ 
ever,  caused  the  geographical  isolation  of  the  once 
separated  states  to  disappear.  The  development  of 
industry  and  commerce  has,  notwithstanding  the 
acquisition  of  the  fertile  fields  of  the  West  and  the 
attendant  agricultural  development,  caused  the 
formerly  overwhelmingly  predominating  agricultural 
character  of  the  population  to  be  lost.  The  gradual 
spread  of  the  English  language  has  brought  about  a 
complete  unity  in  speech,  while  the  greatly  diminished 
influence  of  religious  differences  when  taken  together 
with  the  complete  separation  of  church  and  state  has 
prevented  the  centrifugal  influences  due  to  creeds 
from  making  themselves  felt.  At  the  present  time, 
therefore,  we  have  for  the  economic  and  social  basis 
of  our  political  system  a  series  of  closely  connected 
communities  inhabited  by  a  reasonably  homogeneous 
population  whose  interests  are  industrial  and  com¬ 
mercial  as  well  as  agricultural. 

Notwithstanding  this  centralization,  the  tendency 
has  been,  with  the  exception  of  the  period  immediately 
succeeding  the  adoption  of  the  constitution,  to  em¬ 
phasize  the  rights  of  the  states  rather  than  the  powers 
of  the  federal  government.  This  tendency,  when 
combined  with  the  acceptance  by  the  American  people 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  n 


generally  of  an  extremely  individualistic  conception 
of  the  powers  of  government,  has  resulted  in  a  con¬ 
stitutional  tradition  which  is  apt  not  to  accord  to  the 
federal  government  powers  it  unquestionably  ought 
to  have  the  constitutional  right  to  exercise.  The 
question  naturally  arises  before  those  who  have  no 
belief  in  a  static  political  society  or  in  permanent 
political  principles  of  universal  application,  but  who, 
on  the  contrary,  are  of  the  opinion  that  political 
organizations  must  be  so  framed  and  governmental 
powers  must  be  so  formulated  as  to  be  in  accord  as 
far  as  possible  with  the  actual  economic  and  social 
situation,  —  Is  the  kind  of  political  system  which  we 
commonly  believe  our  fathers  established  one  which 
can  with  advantage  be  retained  unchanged  in  the 
changed  conditions  which  are  seen  to  exist? 

The  answer  to  this  question  must  be  made  in  view 
of  two  sets  of  considerations.  In  the  first  place,  we 
may  justly  inquire  whether  other  communities  which 
have,  since  the  latter  part  of  the  eighteenth  century, 
felt  obliged  to  form  a  federal  system  of  government  — 
for  that  is  the  system  under  which  we  live  —  have 
deemed  it  expedient  to  establish  relations  between 
their  local  communities  and  their  national  government 
similar  to  those  which  we  have  believed  were  estab¬ 
lished  for  all  time  by  the  constitution  of  the  United 
States  and  which  many  are  still  endeavoring  to  retain, 
or  whether  such  communities  have  so  arranged  those 
relations  as  to  bring  them  into  accord  with  existing 
facts  rather  than  with  some  absolute  political  theory. 
If  investigation  shows  us  that  the  latter  is  the  case, 
we  have  established  a  presumption,  to  say  the  least, 
that  we  should  abandon  the  idea  that  the  political 


12  SOCIAL  REFORM  AND  THE  CONSTITUTION 

theory  at  the  basis  of  our  constitutional  system  is 
either  permanent  or  absolute,  and  should  conclude,  on 
the  contrary,  that  that  system  should  be  made  to 
harmonize  with  our  actual  economic  and  social  situa¬ 
tion. 

Now,  as  a  matter  of  fact,  we  have  several  examples 
of  the  establishment  of  federal  government  postdating 
ours.  The  most  important  are  the  Dominion  of 
Canada,  established  in  1867;  the  German  Empire, 
established  in  1871;  and  the  Commonwealth  of  Aus¬ 
tralia,  established  in  1900.  In  all  these  cases  economic 
conditions  were  somewhat  different  from  what  they 
were  with  us  in  the  eighteenth  century.  In  all,  the 
means  of  communication  between  the  different  com¬ 
munities  seeking  to  form  a  union  were  better  than 
was  the  case  with  us.  In  all  there  were  more  com¬ 
mon  interests  than  existed  in  the  United  States  when 
our  constitution  was  adopted,  and  in  all  greater 
powers  have  been  given  to  the  central  government 
than  are  believed  by  many  to  have  been  given  to  the 
federal  government  of  the  United  States  in  1789. 
Thus  in  some  it  has  been  thought  to  be  necessary  to 
have  one  system  of  law  administered  under  the  control 
of  one  Supreme  Court  instead  of  systems  peculiar  to 
each  state,  as  is  the  rule  in  this  country.  In  practically 
all  the  regulatory  power  of  the  national  legislature  has 
been  recognized  as  supreme,  while  in  one,  i.e.  Ger¬ 
many,  it  has  been  provided  that  the  constitution 
may  be  amended  when  such  amendment  may  seem 
desirable  by  the  federal  government  without  the  in¬ 
terposition  of  the  states.  Even  in  Australia,  whose 
constitution  is  modeled  more  than  the  others  on  that 
of  the  United  States,  an  amendment  to  the  constitu- 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  13 

tion  may  be  made  by  the  action  of  the  Parliament, 
ratified  by  a  majority  of  all  the  voters  voting  on  the 
question,  and  a  majority  of  the  states  at  the  same 
election.  The  latest  attempt  at  the  union  of  separate 
communities  —  viz.  the  South  African  Union  —  prac¬ 
tically  abandons  completely  the  idea  of  federal  gov¬ 
ernment,  and  accords  to  the  provinces,  as  they  are 
called,  only  a  certain  administrative  autonomy  similar 
to  that  which  under  some  American  state  constitu¬ 
tions  is  regarded  as  possessed  by  the  local  corporations. 

It  may  therefore  be  said  that  the  experience  of  the 
civilized  world  since  our  constitution  was  adopted  is 
opposed  to  a  system  of  federal  government  which 
fixes  unalterably  and  in  accordance  with  some  politi¬ 
cal  theory  of  universal  application  the  jurisdiction  of 
the  national  and  state  governments.  Furthermore, 
the  recently  established  systems  of  federal  govern¬ 
ment  accord  greater  power  to  the  national  govern¬ 
ment  than  is  ordinarily  believed  to  be  accorded  by 
our  constitution  to  the  national  government  of  the 
United  States.  We  are  justified,  therefore,  in  assuming 
that,  if  the  American  people  were  called  upon  at  the 
present  time  to  frame  a  scheme  of  federal  govern¬ 
ment,  they  would  adopt  one  which  departed  in  a 
number  of  respects  from  the  one  under  which  we  now 
live,  and  which  would  resemble  that  of  Germany  or  of 
Canada  in  that  it  would  make  provision  for  greater 
ease  of  constitutional  amendment  and  for  securing 
to  the  national  government  greater  powers  than  are 
believed  by  many  to  be  accorded  to  the  government 
of  the  United  States  under  the  present  constitution. 

But  we  are  led  to  such  a  conclusion  not  alone  by 
the  experience  of  the  countries  in  question,  but  as  well 


14  SOCIAL  REFORM  AND  THE  CONSTITUTION 


by  the  difficulties  we  encounter  in  our  own  country 
in  our  attempts  to  solve  the  problems  which  press 
upon  us  with  the  greatest  insistence.  The  difficulties 
arising  as  the  result  of  the  existence  of  a  law  which 
varies  from  state  to  state  in  such  important  matters 
as  divorce  and  general  commercial  relations  have  led 
to  the  formation  in  this  country  of  permanent  state 
commissions  for  uniform  legislation  and  to  the  recent 
establishment  of  the  annual  conference  of  the  execu¬ 
tives  of  the  states  spoken  of  as  “The  House  of  Gov¬ 
ernors.”  The  people  of  the  United  States  have  not, 
however,  been  satisfied  with  such  unity  as  may  be 
secured  through  the  cooperation  of  the  state  govern¬ 
ments.  The  federal  government  is  every  day  assum¬ 
ing  to  exercise  greater  powers,  and  little  opposition  to 
this  action  is  manifested  except  from  those  whose 
interest  demands  freedom  from  all  government  con¬ 
trol,  or  who  still  believe,  as  some  do,  that  what  our 
fathers  did  in  the  eighteenth  century  should  not  be 
changed. 

The  greater  confidence  which  the  people  of  the 
United  States  exhibit  in  the  federal  government  as 
compared  with  the  state  governments  may  be  due  in 
some  measure,  as  Professor  Henry  Jones  Ford  has 
pointed  out,1  to  the  political  weakness  of  the  state 
governments,  due  to  their  constitutional  organiza¬ 
tion.  Owing  to  the  ease  with  which  state  consti¬ 
tutions  may  be  amended,  changes  have  been  made 
in  the  original  state  organization  which  resembled 
at  one  time  very  closely  our  national  organization. 
These  changes  were  due  to  the  supposed  dictates 

1  “The  Influence  of  State  Politics  in  Expanding  Federal  Power,” 
Proceedings  of  American  Political  Science  Association,  Vol.  V,  p.  53. 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  15 

of  democracy,  but  have  had  the  result  of  so  disorgan¬ 
izing  the  state  governments,  largely  through  the  too 
extensive  application  of  the  principle  of  popular  elec¬ 
tion,  the  establishment  of  too  many  checks  on  official 
action,  and  the  balancing  of  one  authority  over 
against  another,  that  both  the  possibility  of  effective 
government  has  been  greatly  diminished,  and  the 
responsibility  of  the  government  to  the  people  has 
been  lost.  As  Professor  Ford  shows,  the  people  of 
the  country,  disgusted  at  the  inefficiency  and  corrup¬ 
tion  of  the  state  governments,  due  thus  in  large 
measure  to  defective  organization,  are  more  and  more 
turning  to  the  national  organization  for  relief,  just 
as,  when  the  conditions  were  reversed,  the  people  of 
Germany  turned  from  the  impotent  Imperial  govern¬ 
ment  of  the  seventeenth  and  eighteenth  centuries  to 
the  more  vigorous  state  governments  which  were 
then  developing. 

The  refinements  to  which  the  Supreme  Court  of 
the  United  States  has  resorted  in  its  endeavor,  by 
differentiating  the  field  of  work  of  the  states  on  the 
one  hand  from  that  of  the  national  government  on 
the  other,  to  find  constitutional  justification  for  this 
extension  of  federal  power,  have  brought  it  about  that 
the  law  is  uncertain  and  that  the  actual  decisions 
reached  by  that  august  body  are  by  some  accounted 
for  by  the  personal  predilections  of  the  individual 
members  of  the  court  rather  than  by  the  logical 
application  of  legal  principles.  Our  constitutional 
law  is  losing  what  legal  character  it  may  once  have 
had,  and  is  becoming  more  or  less  a  system  of  political 
science  which  at  one  time  favors  the  demands  of  the 
advocates  of  the  maintenance  of  the  status  quo  in  the 


l6  SOCIAL  REFORM  AND  THE  CONSTITUTION 


domain  of  political  relations,  and  at  another  is  in¬ 
fluenced  by  conceptions  of  present  economic  and  social 
needs.  In  other  words,  the  Supreme  Court  of  the 
United  States  has  really  become  a  political  body  of 
the  supremest  importance.  For  upon  its  determina¬ 
tion  depends  the  ability  of  the  national  legislature  to 
exercise  powers  whose  exercise  is  believed  by  many 
to  be  absolutely  necessary  to  our  existence  as  a  demo¬ 
cratic  republic.  What  we  need  more  than  anything 
else  at  the  present  time  is  a  consistent  theory  of  con¬ 
stitutional  interpretation,  which  will  permit  of  our 
orderly  development  as  a  nation  in  accordance  with 
our  economic  and  social  needs,  and  is  not  confined 
within  the  political  and  legal  conceptions  of  a  century 
or  more  ago.1 

Our  political  problem  is  not,  however,  confined  to 
the  determination  of  the  relations  of  the  national  and 
state  governments,  but  has  to  do  as  well  with  the 
reciprocal  relations  of  the  three  great  departments  of 
government  recognized  by  our  constitutional  law. 
When  our  governmental  system  was  established,  the 
political  thinkers  of  the  world  lay  under  the  spell  of 
the  great  philosopher  Montesquieu,  who,  in  his  “  Esprit 
des  Lois,”  had  set  forth  with  such  force  his  famous 
principle  of  the  separation  or  distribution  of  the 
powers  of  government.  Up  to  the  time  of  the  adop¬ 
tion  of  the  American  constitutions  this  principle  had 
been  a  political  theory  whose  observance  in  general 
outline  was  regarded  as  essential  to  constitutional 

1  For  an  appreciation  by  a  foreigner  of  the  present  position  of  our 
Supreme  Court,  see  Leacock,  “The  Limitations  of  Federal  Govern¬ 
ment/’  Proceedings  of  American  Political  Science  Association,  Vol.  V, 
P-  37- 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  17 


government.  With  its  incorporation  into  American 
written  constitutions,  however,  and  with  the  recog¬ 
nition  of  the  principle  that  the  courts  had  both  the 
right  and  duty  of  declaring  unconstitutional  acts  of 
the  legislature  which  they  regarded  as  not  in  accord 
with  such  written  constitutions,  what  had  been  a 
theory  of  political  science  became  a  rule  of  law  which 
the  courts  would  apply.  In  so  far  as  those  constitu¬ 
tions  have  been  difficult,  if  not  impossible,  of  amend¬ 
ment,  and  in  so  far  as  the  courts  have  considered  the 
question  of  the  constitutionality  of  legislative  acts  as 
legal  rather  than  political,  and  have  followed  the  doc¬ 
trine  of  stare  decisis  rather  than  the  rule  that  they 
should  adapt  their  decisions  to  present  economic  and 
social  needs,  they  have  fixed  upon  the  American 
people  for  all  time  a  system  of  government  which  was 
framed  as  a  result  of  the  consideration  of  the  political 
conditions  of  the  eighteenth  century,  and  which  of 
necessity  has  no  regard  for  the  needs  of  the  twentieth 
century. 

Finally,  it  is  to  be  remembered  that  the  American 
constitutions  contain  bills  of  rights  which  formulate 
certain  individual  rights.  Of  these  rights  those  to 
whom  they  are  guaranteed  may  not  be  deprived  even 
by  legislative  action.  For  the  courts  here  as  before 
may  declare  such  action  to  be  unconstitutional.  If 
the  courts  take  the  same  attitude  with  regard  to  such 
constitutional  provisions,  as  has  been  described,  we 
have  under  similar  conditions  a  sphere  of  individual 
freedom  of  action,  the  conception  of  which  was  again 
derived  from  a  consideration  of  eighteenth-century 
conditions,  and  has  therefore  no  regard  for  existing 
social  needs, 
c 


1 8  SOCIAL  REFORM  AND  THE  CONSTITUTION 

In  order  to  understand  what  effect  upon  social 
reform  such  constitutional  limitations  have,  it  will  be 
necessary  for  us  to  consider  what  are  the  measures 
being  taken  by  the  governments  of  progressive  peoples, 
and  especially  of  those  unhampered  by  constitutional 
limitations,  to  alleviate  the  evils  which  manifest  them¬ 
selves  in  connection  with  present  social  conditions. 

III.  The  Social  Problems  of  the  United  States 

It  is  somewhat  difficult  to  state  in  any  reasonable 
compass  the  measures  which  go  to  make  up  a  com¬ 
prehensive  plan  of  social  reform.  It  is  practically  im¬ 
possible  to  make  exhaustive  any  such  statement  that 
may  be  attempted.  All  that  can  be  done  is  to  classify 
under  appropriate,  though  at  the  same  time  rather 
broad,  headings  some  of  the  more  important  and,  it  is 
hoped,  typical  measures  either  adopted  or  proposed 
as  means  for  remedying  the  evils  in  connection  with 
our  modern  industrial  and  capitalistic  social  and 
economic  conditions  and  institutions.  With  this  idea 
in  mind,  we  may  place  the  concrete  measures  selected 
for  observation  and  comment  under  the  three  general 
heads  of  Government  Ownership,  Government  Regu¬ 
lation,  and  Government  Aid. 

I.  GOVERNMENT  OWNERSHIP 

Government  ownership  is  characteristic  of  modern 
social  reform  really  only  in  those  countries  like  the 
United  States,  in  which  the  theory  of  laisser  faire  has 
been  regarded  both  fundamental  and  axiomatic  as  a 
rule  of  social  conduct.  In  other  countries  —  particu- 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  19 


larly  those  of  continental  Europe  —  government 
ownership  has  either  developed  almost  imperceptibly 
out  of  the  domainial  rights  possessed  for  a  long  time 
by  the  crown  in  such  things  as  forests  and  mines,  or 
has  been  adopted,  as  in  the  case  of  railways,  for  mili¬ 
tary  and  fiscal  rather  than  social  reasons.  In  Eng¬ 
land,  however,  it  has  been  applied  under  the  form  of 
the  municipal  ownership  and  operation  of  the  peculiar 
services  necessitated  by  the  development  of  urban 
life,  more,  it  would  seem,  as  a  result  of  social  reasons, 
though  it  must  be  admitted  that  the  desire  to  find 
new  sources  of  revenue  from  which  to  provide  for  in¬ 
creasing  urban  expenditure  has  been  a  powerful  motive 
with  British  borough  councils. 

In  Australasia  the  motives  which  have  led  to  the 
spread  of  government  ownership  have  also  been 
somewhat  mixed.  But  on  the  whole  it  may  perhaps 
be  safely  said  that  social  motives  have  predominated. 
In  this  part  of  the  world,  government  ownership  has 
been  extended  in  directions  in  which  profit  could 
hardly  be  expected,  but  the  action  which  has  been 
taken  has  been  had  with  the  idea  of  reducing  to  the 
individual  the  expense  of  a  service  of  which  it  has 
been  deemed  desirable  that  he  should  avail.  Such 
would  certainly  appear  to  be  the  reason  why  the 
government  of  New  Zealand,  e.g.  has  entered  into  the 
business  of  both  life  and  fire  insurance. 

In  the  United  States,  however,  different  from  the 
other  countries  which  have  been  mentioned,  what 
little  government  ownership  has  been  entered  upon 
has  been  motived  by  the  desire  to  provide  a  service 
which  it  was  believed  could  be  better  done  by  the 
government  than  by  private  individuals  and  com- 


20  SOCIAL  REFORM  AND  THE  CONSTITUTION 


panies;  and  the  fear  that  such  government  owner¬ 
ship  might  prove  more  expensive  than  private  own¬ 
ership  has  been  offset  by  the  belief  that  the  social 
advantages  of  this  method  of  providing  for  a  service 
which  was  believed  to  be  absolutely  necessary,  would 
compensate  for  any  pecuniary  loss  which  might  occur. 
This  has  certainly  been  the  main  idea  at  the  bottom 
of  the  almost  universal  municipal  ownership  and 
operation  of  waterworks  in  the  United  States.  Seldom 
is  it  the  case  that  an  American  city  attempts  even  to 
know  whether  its  management  of  waterworks  is 
profitable  or  not,  so  convinced  is  it  of  the  social 
desirability  of  the  policy  which  it  has  adopted. 

Generally  speaking,  government  ownership  has 
been  everywhere  confined  to  undertakings  which, 
different  from  ordinary  business,  need  for  their  suc¬ 
cessful  operation  the  use  of  powers  exercisable  only 
as  a  result  of  governmental  permission.  Such  an 
undertaking  is  well  illustrated  by  a  railway  enterprise 
which  is  open  to  individuals  only  because  of  special 
provisions  of  law.  Within  the  last  quarter  of  a  cen¬ 
tury,  however,  there  is  a  tendency,  not  as  yet  very 
marked,  for  government  ownership  to  extend  to  cer¬ 
tain  lines  of  ordinary  business  like  insurance,  and  the 
finding  of  employment  for  those  out  of  work,  or  the 
loaning  of  money  to  those  desirous  of  borrowing. 


2.  GOVERNMENT  REGULATION 

Regulation  on  the  part  of  the  government  has  been 
undertaken  in  different  countries  with  two  somewhat 
different  purposes  in  view.  Thus,  the  attempt  has 
been  made  to  limit  the  freedom  of  both  employer  and 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  2 1 


employee  to  contract  for  the  services  of  the  employee 
where  it  is  believed  that  the  recognition  of  such  free¬ 
dom  is  apt  to  be  followed  by  evil  results.  In  this 
class  of  regulations  may  be  placed  those  attempts  to 
limit  the  hours  of  labor  permitted  to  either  the  weaker 
classes  of  laborers  such  as  women  or  children,  or 
laborers  in  employments  prejudicial  to  health,  such  as 
miners,  or  of  special  concern  to  the  public  safety, 
such  as  railway  employees.  Most  progressive  nations 
have  attempted  a  certain  amount  of  such  regulation. 
Some  have  attempted  to  limit  the  hours  of  labor  of 
adult  male  laborers.  Others  have  confined  their 
regulation  to  the  labor  of  women  and  children,  and 
some  have  gone  so  far  as  forbid  such  classes  of 
persons  to  work  at  all  in  certain  occupations. 

Most  progressive  countries  have  also  an  elaborate 
system  of  legislation  which  attempts,  through  com¬ 
pelling  the  adoption  of  safety  appliances  and  the 
provision  of  sanitary  conditions,  to  protect  those 
engaged  in  dangerous  or  unhealthy  occupations  from 
the  damages  necessarily  caused  either  by  the  acci¬ 
dents  which  are  liable  to  occur  in  connection  with 
such  occupations  or  by  working  in  unsanitary  condi¬ 
tions.  In  close  connection  with  this  legislation  may 
be  mentioned  the  attempts  made  so  to  formulate  the 
rules  of  the  law  of  tort  as  to  impose  upon  the  em¬ 
ployer  a  wider  pecuniary  liability  to  the  employee 
for  the  damage  he  may  have  suffered.  The  extreme 
form  which  such  legislation  takes  is  that  of  compen¬ 
sation,  regardless  of  the  question  by  whose  negligence 
the  damage  was  caused.  The  theory  upon  which 
compensation  is  based  is  that  statistics  show  that 
there  is  on  the  average,  even  where  the  best  of  care 


22  SOCIAL  REFORM  AND  THE  CONSTITUTION 


has  been  taken,  a  certain  amount  of  damage  to  the 
laborer  which  is  bound  to  occur,  and  that  this  damage 
should  be  regarded  as  one  of  the  fixed  charges  of  the 
business  like  fire  insurance,  which  should  be  distributed 
over  the  whole  consuming  public  through  an  increase 
in  the  price  of  the  article  in  making  which  the  damage 
occurred.  In  some  instances,  compensation  in  case 
of  injuries  is  indirectly  secured  through  provision  for 
either  voluntary  or  compulsory  insurance  in  case  of 
accident.  Such  insurance  is  also  sometimes  provided 
in  case  of  death  and  sickness,  or  takes  the  form  of  old- 
age  pensions. 

Finally,  in  a  few  states  the  attempt  has  been  made 
to  regulate  through  government  action,  not  merely 
the  conditions  under  which  labor  is  to  be  carried  on 
and  the  hours  during  which  it  is  to  be  permitted,  but, 
through  some  form  of  conciliation  or  arbitration,  as 
well  the  wages  which  are  to  be  paid;  while  it  is  quite 
common  to  prohibit  by  law  the  payment  in  kind  of 
wages  in  certain  industries  and  to  require  that  wages 
shall  be  paid  at  specified  intervals. 

In  the  second  place,  the  congestion  of  the  popula¬ 
tion  in  the  urban  districts,  which  has  been  charac¬ 
teristic  of  western  European  countries,  has  in  its  turn 
called  for  action  in  the  nature  of  regulation  upon  the 
part  of  the  government.  Thus  in  the  cities  of  Ger¬ 
many,  where  this  kind  of  regulation  has  been  carried 
perhaps  the  farthest,  the  attempt  has  been  made  to 
impose  limitations  upon  the  height  and  character  of 
buildings  and  upon  the  area  of  land  buildings  may 
cover,  which  vary  with  particular  districts,  and  by  a 
comprehensive  city  plan,  made  long  in  advance  of 
city  needs  and  intended  to  secure  a  distribution  of 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  23 

population  with  relation  to  occupations,  to  prevent 
an  undue  demand  for  land  in  particular  sections.  In 
the  state  of  New  York  the  attempt  has  been  made 
to  apply  such  regulations  not  to  buildings  in  general, 
but  only  to  those  classes  of  buildings  such  as  tene¬ 
ments,  in  which  the  problem  of  congestion  is  present 
in  its  most  acute  form.  Furthermore,  inasmuch  as 
all  regulations  of  this  sort  can  affect  the  question  of 
congestion  only  from  the  point  of  view  of  the  popu¬ 
lation  per  acre,  the  further  attempt  has  been  made 
to  prevent  congestion  per  room  by  insisting,  in  the 
case  of  buildings  in  which  such  congestion  is  to  be 
apprehended,  that  provision  shall  be  made  for  giving 
each  occupant  a  certain  amount  of  cubic  feet  of  air 
space. 

Closely  connected  with  such  regulation  is  the  pro¬ 
hibition  of  certain  kinds  of  labor  at  the  home  of  the 
laborer,  or  of  subletting  certain  contracts,  as  in  the 
garment-making  industries,  the  purpose  of  such  pro¬ 
visions  being  the  prevention  of  the  development  of 
what  have  come  to  be  known  as  “  sweat  shops.” 
This  has  been  done  rather  commonly  in  Australasia. 

In  the  third  place,  the  attempt  has  been  made  to 
regulate  the  character  of  the  services  rendered  the 
public  by  private  corporations  and  individuals  and  the 
price  which  may  be  charged  for  such  services.  Usually 
these  attempts  have  been  confined  to  those  under¬ 
takings  which,  like  railways  or  what  are  known  as 
public  service  companies,  are  regarded  as,  in  the 
words  of  Anglo-American  law,  “  affected  with  a  public 
interest.”  But  in  exceptional  instances  the  attempt 
has  been  made  to  apply  the  same  principle  in  direc¬ 
tions  where  the  affectation  with  a  public  interest  is 


24  SOCIAL  REFORM  AND  THE  CONSTITUTION 


not  so  apparent.  Thus,  in  Ireland  the  attempt  has 
been  made  to  fix  the  rent  which  may  be  charged  for 
agricultural  lands,  while  in  some  of  the  states  of  the 
American  Union  laws  have  been  enacted  which  pro¬ 
hibit  foreign  corporations  doing  business  within  the 
state  from  charging  in  different  parts  of  the  state 
different  prices,  due  allowance  being  made  for  freight 
charges,  for  the  commodities  which  they  sell. 

In  the  fourth  place,  the  attempt  has  been  made  to 
exercise  the  power  of  taxation  not  merely  for  the 
purpose  of  producing  revenue,  but  of  bringing  about 
certain  desired  social  results.  The  use  of  the  taxing 
power  with  such  an  end  in  view  is  not  a  novel  thing 
either  in  this  country  or  in  foreign  countries.  For 
every  country  which  has  a  protective  tariff  has  con¬ 
sciously  and  purposely  made  use  of  the  taxing  power 
in  order  to  further  the  development  of  its  own  indus¬ 
tries.  The  more  modern  instances  of  this  use  of  the 
taxing  power  are,  however,  characterized  by  the  fact 
that  their  purpose  has  been  to  influence  the  distribu¬ 
tion  of  wealth  rather  than  its  production.  They  have 
all,  therefore,  in  common  progressive  rates  of  taxation 
which  increase  with  the  amount  taxed,  whether  the 
subject  of  taxation  be  property,  income,  or  inheritance. 
Sometimes  the  highest  rates  —  i.e.  upon  the  largest 
amounts  of  property  or  the  greatest  incomes  —  are 
so  high  as  to  make  the  accumulation  and  preserva¬ 
tion  of  large  estates  very  difficult.  In  the  same  way 
high  rates  of  taxation  may  be  imposed,  as  is  the 
case  in  New  Zealand,  on  lands  owned  by  persons  not 
resident  in  the  country  with  the  idea  of  discouraging 
the  absentee  ownership  of  land.  Finally,  it  has  been 
attempted  through  the  selection  of  the  objects  to  be 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  25 

taxed  to  discourage  some  particular  industry  or 
tendency.  Thus  the  endeavor  has  been  made  to 
prevent  the  holding  of  land  for  purposes  of  specula¬ 
tion  through  the  imposition  of  the  entire  burden  of 
the  land  tax  on  the  unimproved  value  of  lands,  as  is 
done  by  New  Zealand,  or  to  force  successful  specula¬ 
tors  in  land  to  share  with  the  public  a  part  of  their 
profit  through  the  taxation  of  the  increment  in  land 
value,  as  is  done  in  a  number  of  German  cities  and  in 
the  famous  English  budget. 

In  the  fifth  place,  the  attempt  has  been  made 
particularly  in  the  United  States  to  prevent  the 
making  of  combinations  and  agreements  in  restraint 
of  trade  and  in  the  interest  of  monopoly. 

3.  GOVERNMENT  AID 

Finally,  the  modern  program  of  social  reform  insists 
that  the  government  in  its  central  or  local  organiza¬ 
tion  shall  positively  aid  the  less  fortunate  members 
of  society,  who  experience  is  believed  to  have  shown 
are  in  need  of  aid.  The  principle  of  government  aid 
is,  of  course,  not  a  new  thing.  Public  poor  relief  has 
for  centuries  been  characteristic  of  Protestant  coun¬ 
tries,  while  both  Protestant  and  Roman  Catholic 
countries  have  for  a  long  time  been  making  public 
provision  for  the  support  and  care  of  the  defective 
and  dependent  classes,  such  as  the  insane  and  feeble¬ 
minded,  and  children  of  tender  years.  But  the  gov¬ 
ernment  aid  which  is  characteristic  of  modern  social 
reform  goes  much  farther  than  the  relief  of  even  able- 
bodied  paupers.  It  attempts  to  give  the  aid  before 
a  condition  of  actual  pauperism  is  reached,  with  the 


26  SOCIAL  REFORM  AND  THE  CONSTITUTION 


idea  of  preventing  such  a  condition.  Possibly  Ger¬ 
many  and  Australasia  have  gone  farther  in  this  direc¬ 
tion  than  most  other  countries.  Thus  Germany  has 
attempted,  by  a  system  of  insurance  for  old  age, 
accident,  and  sickness  which  is  compulsory  on  certain 
classes  of  persons  and  towards  the  expense  of  which 
the  government  contributes,  to  diminish  the  amount 
of  pauperism,  much  of  which  is  believed  to  be  due 
to  the  causes  against  which  this  public  insurance  has 
been  provided. 

New  Zealand,  in  addition  to  providing  for  old  age 
pensions,  has  made  provision  for  loaning  to  persons  in 
need  of  advances,  money  to  enable  them  to  get  a 
start  in  life.  Thus  the  law  of  this  country  provides 
for  such  advances  to  workingmen  in  cities  to  enable 
them  to  own  their  own  homes,  and  to  settlers  on 
public  land,  with  the  idea  both  of  helping  the  rural 
laborer  to  become  an  independent  agriculturalist  and 
of  securing  a  better  distribution  of  the  population, 
which  there  as  elsewhere  tends  to  congregate  in  the 
urban  districts. 

Such  are  some  of  the  methods  adopted  by  the  most 
progressive  nations  of  the  present  day  to  ameliorate 
the  abuses  and  evils  which  have  accompanied  the 
industrial  development  of  the  last  two  hundred  years. 
It  has  not  been  intended  by  the  enumeration  of 
them  which  has  been  given,  and  which  by  no  means 
is  exhaustive,  to  express  any  conclusions  as  to  the 
success  or  failure  of  any  of  them  or,  indeed,  as  to  the 
expediency  of  adopting  them  in  the  United  States. 
All  that  has  been  had  in  mind  has  been  to  give  in  as 
small  a  compass  as  possible  a  description  of  what 
various  countries  which  have  been  called  upon  to 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  27 


solve  modern  social  problems  have  attempted  as  such 
solutions. 

The  political  and  social  problems  which  the  Ameri¬ 
can  people  have  to  face  are,  then : — 

First,  those  arising  from  the  fact  that  we  have, 
under  economic  and  social  conditions  which  bring 
about  considerable  economic  and  social  unity,  a 
political  system  which  was  framed  in  view  of  great 
economic  and  social  disunity. 

Second,  those  caused  by  a  governmental  system 
which  was  based  on  the  fundamental  theory  of  the 
separation  of  governmental  powers,  a  theory  which 
was  elaborated  in  view  of  the  political  development 
of  western  Europe  prior  to  the  end  of  the  eighteenth 
century,  when  political  conditions  were  quite  different 
from  what  they  are  at  present. 

Third,  those  due  to  the  existence  of  a  sphere  of 
individual  freedom  and  a  conception  of  property 
rights  derived  from  a  consideration  of  the  economic 
conditions  and  needs  of  the  eighteenth  rather  than  of 
the  twentieth  century. 

The  question  which  Americans  have  to  ask  them¬ 
selves  is :  Can  the  solution  of  the  political  and  social 
problems  which  exist  in  the  United  States  be  under¬ 
taken  with  hope  of  success  under  the  constitutional 
law  now  in  force  in  this  country?  The  endeavor  to 
answer  this  question  necessarily  involves  a  somewhat 
searching  examination  of  that  law,  and  must  be  based 
upon  an  understanding  of  the  legal  relations  of  the 
federal  government  and  the  states. 

Before  entering  upon  this  examination  it  will  be 
advisable  to  call  attention  to  the  limits  which  the 
time-  at  command  makes  it  necessary  to  place  upon 


28  SOCIAL  REFORM  AND  THE  CONSTITUTION 

our  investigation  and  to  state  the  reasons  why  the 
particular  limits  chosen  have  been  selected.  Under 
the  American  law  the  determination  by  government 
of  the  social  relations  of  individuals  is  in  principle 
within  the  powers  of  the  states,  and  not  the  federal 
government.  The  great  exception  to  the  rule  is  to 
be  found  in  the  case  of  regulations  which  may  be 
regarded  as  justified  by  the  exercise  of  the  power  of 
Congress  to  regulate  commerce  with  foreign  nations 
and  among  the  several  states.  In  addition  to  the 
commerce  clause,  which,  so  far  as  it  confers  authority 
on  the  federal  government,  deprives  the  states  of 
power,  there  are  several  provisions  of  the  United 
States  constitution  which  positively  limit  the  sphere 
of  action  of  the  states.  Thus,  no  state  may  pass  any 
law  impairing  the  obligation  of  contracts,  nor  deprive 
any  person  of  his  liberty  or  property  without  due 
process  of  law.  State  constitutions  also  limit  the 
powers  of  state  legislatures.  The  constitutionality 
of  state  regulation  of  the  social  relations  of  individuals 
must  be  considered,  therefore,  from  two  points  of 
view;  namely,  from  that  of  the  state  constitutions 
and  that  of  the  federal  constitution. 

Upon  some  one  of  these  constitutional  provisions 
the  state  courts  have  based  their  decisions  that  cer¬ 
tain  legislative  acts,  e.g.  regulating  the  relations  of 
labor,  are  unconstitutional.  Many  of  these  cases 
were  decided  prior  to  the  determination  by  the  United 
States  Supreme  Court  of  the  questions  involved  when 
they  came  before  it  on  appeal  from  a  state  court 
holding  such  legislation  constitutional  from  the  point 
of  view  of  the  federal  constitution.  When  the  Su¬ 
preme  Court  was  called  upon  to  decide  questions  of 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  29 

this  sort,  it  took,  in  most  instances,  a  more  liberal 
view  as  to  the  constitutionality  of  such  legislation 
than  had  been  previously  taken  by  some  of  the  state 
courts.  Most  of  the  cases  in  the  Supreme  Court,  as 
well  as  the  more  liberal  cases  in  the  state  courts, 
have  been  based  upon  the  principle  which  in  its 
general  outline  has  been  universally  accepted,  that 
the  general  provisions  of  the  constitutions  referred 
to  do  not  limit  that  rather  ill-defined  power  of  the 
state  known  as  the  police  power.  Whether  legislative 
regulations  are  to  be  considered  as  an  exercise  of  this 
police  power,  is  regarded  as  dependent  upon  their 
adaptability  to  the  purpose  for  which  they  have 
been  adopted,  i.e.  upon  their  reasonableness;  and  the 
question  of  reasonableness  is  to  be  determined  in  the 
light  of  the  conditions  actually  existent  at  the  time 
the  regulations  are  adopted.1 

Furthermore,  the  courts  of  the  present  day  very 
generally  lay  down  the  rule  that  when  courts  are 
called  upon  to  consider  the  constitutionality  of  a 
statute,  they  are  to  presume  that  the  statute  is  con¬ 
stitutional,  and  that  this  presumption  is  overcome 
only  where  it  is  proved,  beyond  a  reasonable  doubt, 
that  the  statute  is  contrary  to  the  constitution.2  It 
therefore  follows  that  a  statute  which  may  at  one 
time  be  regarded  as  unconstitutional,  may,  at  another, 
and  because  of  a  change  in  conditions,  be  held  to  be 
constitutional.  For  such  a  change  in  conditions  may 

1  See  Freund,  “The  Constitutional  Aspect  of  the  Protection  of 
Women  in  Industry,”  Proceedings  of  the  Academy  of  Political  Science 
in  the  City  of  New  York,  Vol.  I,  No.  I. 

2  See  the  Sinking  Fund  Cases,  99  U.  S.  718;  also  Baldwin,  “The 
American  Judiciary,”  p.  103 ;  Dodd,  “The  Growth  of  Judicial  Power,” 
Pol.  Sci.  Qiiar.}  Vol.  XXIV,  p.  193. 


30  SOCIAL  REFORM  AND  THE  CONSTITUTION 


naturally  raise  in  the  mind  of  the  court  a  reasonable 
doubt,  which  may  not  have  existed  prior  to  such 
change  as  to  the  propriety  of  the  action  of  the  legis¬ 
lature;  in  which  case  the  action  of  the  legislature 
must  be  treated  as  constitutional.1 

Finally,  inasmuch  as  the  constitutions  of  the  states 
are,  comparatively  speaking,  rather  easy  of  amend¬ 
ment,  it  has  frequently  happened  that  subsequent  to 
a  decision  of  a  state  court  that  an  act  of  the  state 
legislature  is  unconstitutional,  the  state  constitution 
has  been  so  changed  as  to  remove  all  objections  to 
the  passage  of  the  statute  from  the  point  of  view  of 
the  state  constitution.2  The  natural  result  is  that 
the  limitations  of  the  state  constitutions  as  inter¬ 
preted  by  the  state  courts  are  not  serious  permanent 
obstacles  to  social  reform,  either  in  the  matter  of 
labor  legislation,  or,  indeed,  in  any  other  matter  in 
which  change  is  desired. 

But  the  limitations  imposed  upon  the  power  of  the 
legislature,  both  state  and  national,  to  inaugurate  a 
plan  of  social  reform  are  to  be  found  as  well  in  the 
federal  constitution.  As  the  act  of  Congress  which 
regulates  the  jurisdiction  of  the  United  States  courts 
stands  at  present,  both  the  state  and  the  United 
States  courts  have  jurisdiction  of  cases  arising  under 
the  constitution  of  the  United  States.  Only  civil 
cases  involving  a  certain  amount  may,  however,  be 
removed  from  the  state  to  the  United  States  courts, 


1  Cf.  Ritchie  v.  State,  155  Ill.  98  and  Ritchie  &  Co.  v.  Wayman, 
244  Ill.  509. 

2  See  Dodd,  loc.  cit.,  p.  201,  who  says:  “A  tendency  to  overrule 
judicial  decisions  by  constitutional  alterations  has  been  clearly  ap¬ 
parent  in  recent  years.” 


DEMANDS  OF  POLITICAL  AND  SOCIAL  REFORM  31 

and  appeals  may  go  from  the  decisions  of  the  state 
courts  of  last  instance  to  the  Supreme  Court  of  the 
United  States  only  in  the  case  the  former  courts 
declare  an  act  of  the  state  legislature  to  be  constitu¬ 
tional  from  the  point  of  view  of  the  Ufiited  States 
constitution.  The  result  is  that  the  constitutional 
law  of  the  country  is  not,  either  necessarily  or  actually, 
uniform.  For  a  state  court  may  declare  unconstitu¬ 
tional  from  the  point  of  view  of  the  federal  constitu¬ 
tion  an  act  of  a  state  legislature  which  would  have 
been  regarded  as  constitutional  by  the  United  States 
Supreme  Court.  If,  therefore,  the  state  courts  are 
more  conservative  than  the  Supreme  Court,  and 
many  believe  they  are,  they  determine  finally  what  is, 
in  a  particular  state,  the  effect  of  the  limitations  of 
the  federal  constitution  upon  state  action.  This  con¬ 
dition  of  things  is,  however,  not  one  which  need  be 
permanent,  nor  one  which  can  be  changed  only 
through  constitutional  amendment.  For  the  juris¬ 
diction  of  the  federal  courts  is  in  these  matters  entirely 
within  the  control  of  Congress,  which  may  constitu¬ 
tionally  provide,  if  it  sees  fit  to  do  so,  that  all  cases 
both  civil  and  criminal  involving  a  federal  question 
may  be  removed  to  the  federal  courts,  and  that  appeals 
may  go  to  the  Supreme  Court  from  all  decisions  of 
the  state  courts  of  last  instance,  whether  they  affirm 
or  not  the  constitutionality  of  state  laws. 

Therefore,  from  a  constitutional  point  of  view,  the 
attitude  of  the  Supreme  Court  of  the  United  States 
is  the  only  really  important  thing  to  consider  when 
we  are  treating  of  the  permanent  constitutional 
obstacles  to  social  reform  in  the  United  States.  On 
that  account,  what  will  be  said  as  to  the  effect  on  the 


32  SOCIAL  REFORM  AND  THE  CONSTITUTION 

possibilities  of  such  reform  of  the  limitations  con¬ 
tained  in  the  federal  constitution  will  in  the  main  be 
confined  to  a  consideration  of  the  attitude  of  the 
Supreme  Court  towards  these  questions. 

Our  attention  will  naturally  be  directed,  first  to  an 
examination  of  the  powers  of  the  Congress  of  the 
United  States,  as  they  are  to  be  derived  from  a  con¬ 
sideration  of  the  provisions  of  the  constitution  as 
interpreted  by  the  Supreme  Court,  and  particularly 
to  those  clauses  which  contain  the  power  to  regulate 
commerce  and  the  judicial  power.  For  it  is  almost 
only  through  the  exercise  of  these  powers  that  any 
great  centralization  of  our  government  may  be 
secured. 


CHAPTER  II 

CONSTITUTIONALITY  OF  UNIFORM  COMMERCIAL 

REGULATION 

The  constitution  of  the  United  States  may  be 
divided  into  four  parts,  or  perhaps  it  would  be  more 
accurate  to  say  that  almost  every  provision  of  that 
instrument  may  be  placed  under  one  of  four  heads. 
These  are  organization,  functions,  prohibitions  on 
federal  action,  and  prohibitions  on  state  action. 
Those  provisions  which  relate  to  governmental  organi¬ 
zation  do  not  interest  us  at  this  juncture,  as  their 
purpose  is  merely  to  provide  the  machine  which  is  to 
do  the  work  assigned  to  the  federal  government. 
Those  which  impose  limitations  upon  the  action  of  the 
federal  and  state  governments  are  of  some  interest  to 
us,  but  only  in  so  far  as  they  affect,  as  they  frequently 
do,  indirectly  at  any  rate,  the  functions  of  the  federal 
government.  It  is  the  provisions  relative  to  the 
functions  of  the  federal  government  to  which  our 
attention  must  be  almost  exclusively  directed,  since 
they  determine  the  competence  of  the  federal  govern¬ 
ment,  and  since  the  powers  which  it  may  discharge 
must  all  find  their  origin  in  one  or  more  of  these  pro¬ 
visions.  Most  of  these  provisions  are  to  be  found  in 
Art.  i,  Sec.  8.  This  section  enumerates  most  of  the 
powers  which  are  vested  by  the  constitution  in  the 
legislative  organ  of  the  national  government,  viz.  the 
Congress. 

d  33 


34  SOCIAL  REFORM  AND  THE  CONSTITUTION 


Of  the  provisions  which  outline  the  functions  of 
the  federal  government,  some  relate  to  the  method  by 
which  the  Congress  or  other  authorities  of  the  federal 
government  shall  act,  as,  e.g .,  the  provisions  for  the 
apportionment  of  direct  taxes  among  the  states. 
These  also  have  little  interest  for  our  inquiry  except 
in  so  far  as  the  method  of  action  provided  is  of  such 
a  character  as  seriously  to  limit  the  extent  of  the 
power  granted. 

The  other  provisions  of  the  constitution  relative  to 
the  functions  of  the  federal  government  affect  the 
content  of  the  powers  granted  rather  than  the  methods 
of  their  exercise,  and  are  therefore  the  provisions 
which  determine  the  character  of  the  government 
when  regarded  from  the  viewpoint  of  the  relations 
of  the  federal  government  and  the  states.  Of  these 
provisions  a  number,  to  which  must  be  added  some 
of  those  provisions  prohibiting  action  on  the  part  of 
the  states,  were  evidently  adopted  with  the  idea  of 
conferring  upon  the  federal  government  the  exclusive 
power  of  dealing  with  foreign  governments,  including 
a  wide  war  power.  These  provisions  have  since  the 
adoption  of  the  constitution  been  interpreted  by  the 
Supreme  Court  as  embracing  the  power  to  acquire 
foreign  territory. 1  Other  provisions  permit  the  estab¬ 
lishment  by  the  federal  government  of  a  financial 
system  of  its  own,  including  a  national  currency,  and 
a  system  of  courts,  independent  in  every  respect  of 
the  states.  Still  other  provisions  vest  in  Congress 
legislative  powers  over  specially  enumerated  subjects 
such  as  postal  matters,  patents  and  copyrights, 
naturalization  and  bankruptcy,  the  territories,  the 

1  Cf.  Downes  v.  Bidwell,  182  U.  S.  244. 


UNIFORM  COMMERCIAL  REGULATION 


35 


seat  of  the  federal  government,  and  places  purchased 
with  the  consent  of  the  states  for  the  purposes  of  the 
federal  government;  while  the  last  clause  of  Art.  i, 
Sec.  8  gives  to  Congress  the  power  to  make  all  laws 
which  shall  be  necessary  and  proper  for  carrying  into 
execution  any  power  vested  by  the  constitution  in  the 
government  of  the  United  States  or  any  department 
or  officer  thereof. 

It  is  characteristic  of  the  provisions  fixing  the  con¬ 
tent  of  the  sphere  of  activity  of  the  federal  govern¬ 
ment,  which  have  been  mentioned,  that  almost  all  of 
them  are  rather  special  in  character.  Most  of  the 
litigation  that  has  been  had  with  regard  to  them  has 
been  carried  on  about  the  question  whether  the 
powers  granted  in  them  are  exclusive  in  Congress  or 
not,  rather  than  with  the  purpose  of  determining  the 
extent  of  the  powers  themselves.  Perhaps  an  excep¬ 
tion  should  be  made  of  the  power  to  make  all  neces¬ 
sary  and  proper  laws.  This  power,  as  is  well  known, 
was  in  our  early  history  interpreted  rather  liberally. 
But  even  the  liberal  interpretation  which  was  given 
may  not  properly  be  said  to  have  increased  the  actual 
competence  of  the  federal  government,  since  the  powers 
recognized  affect  almost  exclusively  methods  and  not 
subjects  of  action. 

The  great  exception  to  the  rule  that  the  powers 
granted  to  the  federal  government  were  rather  special 
than  general  in  character  is,  however,  to  be  found  in 
the  power  “to  regulate  commerce  with  foreign  nations, 
among  the  several  states  and  with  the  Indian  tribes.”  1 
The  content  of  the  subject  to  be  regulated  is  not 
determined,  the  methods  of  regulation  are  not  stated, 
1  Const.  Art.  I,  Sec.  8,  Clause  3. 


36  SOCIAL  REFORM  AND  THE  CONSTITUTION 


nor  are  the  words  “ among  the  several  states”  defined. 
The  result  is  that,  if  the  decision  of  all  the  questions 
which  may  arise  under  this  clause  is  made  by  a  body 
or  bodies  representing  the  nation  as  a  whole,  as  is  the 
case,  the  clause  may  be,  and  probably  will  be,  inter¬ 
preted  in  such  a  way  as  vastly  to  increase  the  power 
of  the  federal  government.  It  is  the  one  clause  in 
the  constitution  which  lends  itself  most  readily  as  a 
means  for  the  reconstitution  of  our  political  system  in 
accordance  with  changing  economic  needs.  For  the 
Supreme  Court  may  properly  consider  that  a  matter 
which  at  one  time  was  not  really  “  commerce  among 
the  several  states,  ”  and  was  not,  therefore,  subject  to 
federal  regulation,  may  take  on  that  character  as  a 
result  of  an  actual  centralization  of  our  economic 
conditions.  For  that  reason  we  shall  consider  at 
some  length  the  powers  which  both  Congress  and  the 
states  have  under  the  commerce  clause  of  the  con¬ 
stitution  as  it  has  been  construed  by  the  courts. 

In  the  early  history  of  the  United  States,  practically 
all  the  commerce  of  the  country,  both  foreign  and 
between  the  several  states,  was  carried  on  by  water. 
Naturally,  then,  the  commerce  which  Congress  first 
attempted  to  regulate  was  navigation,  which  was  held 
by  the  Supreme  Court  to  be  included  within  com¬ 
merce.1  In  reaching  this  decision  the  court  was  in¬ 
fluenced  by  the  fact  that  Congress  had  already 
assumed  the  right  to  regulate  navigation.  Chief 
Justice  Marshall,  in  giving  the  opinion  of  the  court, 
said:  “If  commerce  does  not  include  navigation,  the 
government  of  the  Union  has  no  direct  power  over 
the  subject,  and  can  make  no  law  prescribing  what 
1  Gibbons  v.  Ogden,  9  Wheaton,  1  (1824). 


UNIFORM  COMMERCIAL  REGULATION 


37 


shall  constitute  American  vessels  or  requiring  that 
they  shall  be  navigated  by  American  seamen.  Yet 
this  power  has  been  exercised  from  the  commence¬ 
ment  of  the  government,  has  been  exercised  with  the 
consent  of  all,  and  has  been  understood  by  all  to  be  a 
commercial  regulation.  All  America  understands  and 
has  uniformly  understood  the  word  ‘  commerce 1  to 
comprehend  navigation.  It  was  so  understood  and 
must  have  been  so  understood  when  the  Constitution 
was  framed.” 

At  first,  apparently,  it  was  believed  that  in  so  far  as 
Congress  did  not  regulate  commerce,  the  states  had 
the  right  to  regulate  it.1  Later,  it  was  held  that  the 
power  of  the  states  was  limited  to  that  part  of  com¬ 
merce  which  in  the  opinion  of  the  Supreme  Court  did 
not  admit  of  uniform  regulation ; 2  and  that,  in  so  far 
as  Congress  refrained  from  regulating  that  part  of 
commerce  which  was  susceptible  of  uniform  regula¬ 
tion,  its  inaction  indicated  an  intention  that  commerce 
should  be  unregulated  and  therefore  free.3 

While  the  early  cases  were  decided  with  reference 
to  navigation,  the  immediately  succeeding  cases  were 
decided  with  reference  to  commerce  on  land,  and 
they  interpreted  not  so  much  the  power  of  regulation 
possessed  by  Congress  as  the  power  still  possessed  by 
the  states.  In  deciding  this  class  of  cases,  the  Su- 

1  License  Cases,  5  Howard,  504  (1847). 

2  Cooley  v.  Board,  12  Howard,  299  (1851). 

3  Henderson  v.  Mayor,  92  U.  S.  259 ;  Robbins  v.  Shelby  County 
Taxing  District,  120  U.  S.  489.  As  will  be  pointed  out  later,  state 
police  regulations,  which  are  not  regarded  as  regulations  of  commerce, 
although  they  affect  commerce,  are  permitted  in  the  absence  of  ac¬ 
tion  by  Congress,  even  though  such  police  regulations  are  made  as 
to  a  subject  which  permits  of  uniform  regulation. 


38  SOCIAL  REFORM  AND  THE  CONSTITUTION 


preme  Court  held  that  a  number  of  matters  not 
connected  in  any  way  with  navigation  or  even  with 
transportation,  such  as  sales  and  the  negotiations 
intended  to  induce  sales,  were  included  within  the 
term  “  commerce.”1 

Our  conceptions  of  the  nature  and  extent  of  the 
power  of  Congress  to  regulate  commerce  have  thus 
been  derived  from  the  decisions  of  the  Supreme 
Court:  first,  as  to  navigation;  second,  as  to  transpor¬ 
tation  by  land,  which  the  states  may  not  regulate 
because  it  is  a  part  of  foreign  or  interstate  commerce; 
and,  third,  as  to  commerce,  neither  navigation  nor 
transportation  by  land,  and  also  not  subject  to  state 
regulation.  Only  comparatively  recently  in  our  his¬ 
tory  has  Congress  attempted  itself  positively  to  regu¬ 
late  commerce  which  is  not  navigation;  and  only 
after  Congress  had  begun  to  do  this  could  the  ques¬ 
tion  arise,  whether  the  conceptions  derived  from  the 
decisions  as  to  commerce  which  is  at  the  same  time 
navigation,  or  which  is  not  subject  to  regulation  by 
the  states,  are  applicable  to  commerce  which  is  not 
navigation,  when  the  attempt  is  made  by  Congress,  to 
subject  that  commerce  to  regulation.  While  we  are 
unquestionably  aided  in  answering  this  question  by  a 
consideration  of  the  decisions  relative  to  the  powers 
of  the  states,  it  must  always  be  borne  in  mind  that 
the  recognition  of  powers  in  the  states  over  commerce 
is  coupled  with  the  assumption  that  state  regulations 
of  foreign  and  interstate  commerce  are  valid  only 
where  they  are  of  a  local  or  of  a  police  character  and 
are  not  in  conflict  with  any  action  which  Congress 
may  have  taken. 

1  E.g.  Robbins  v.  Shelby  County  Taxing  District,  supra. 


UNIFORM  COMMERCIAL  REGULATION 


39 


I.  The  Power  of  Congress  to  Regulate  Naviga¬ 
tion 

What  now  has  been  the  attitude  of  the  Supreme 
Court  as  to  the  power  of  Congress  to  regulate  foreign 
and  interstate  navigation?  In  order  to  answer  this 
question  we  must  ascertain  what  is  meant:  first,  by 
navigation;  second,  by  foreign  and  interstate  naviga¬ 
tion;  and  third,  by  regulation. 

What  is  meant,  now,  by  navigation  ?  In  the  early 
history  of  the  country,  e.g.  in  1825,  the  only  waters 
which  were  considered  navigable  from  a  legal  point  of 
view  were  waters  in  which  the  tide  ebbed  and  flowed.1 
Later  on,  in  1851,  this  view  was  abandoned;  and  in 
The  Propeller  Genesee  Chief  v.  Fitzhugh,2  the  Steam¬ 
boat  Magnolia,3  and  The  Hine  v.  Trevor,4  the  concep¬ 
tion  of  navigable  waters  was  extended  so  as  to  include 
the  Great  Lakes  and  the  waters  of  rivers  totally  within 
the  limits  of  a  state  —  waters  which,  though  connected 
with  the  sea,  or  on  which  communication  with  other 
states  was  possible,  were  unaffected  by  the  ebb  and 
flow  of  the  tide.  In  1903  the  conception  was  still 
further  extended  so  as  to  include  the  Erie  Canal,  an 
artificial  waterway  constructed  by  one  of  the  states 
and  entirely  within  its  limits,  but  connecting  the 
navigable  waters  of  Lake  Erie  with  the  ocean.5 

1  The  Thomas  Jefferson,  10  Wheaton,  428  (1825),  followed  in 
The  Steamboat  Orleans  v.  Phoebus,  n  Peters,  175. 

2 12  Howard,  443.  3  20  Howard,  296.  4  4  Wall,  555. 

5  The  Robert  W.  Parsons,  191  U.  S.  17.  Cf.  also  Simmons  v.  The 
Jefferson,  215  U.  S.  130,  in  which  it  is  held  that  the  admiralty  juris¬ 
diction  extends  to  a  “libel  claiming  salvage  for  services  rendered  by 
tugs  in  subduing  a  fire  communicated  from  the  shore  to  a  vessel 
undergoing  repairs  in  a  dry  dock  from  which  all  water  had  been 
emptied.”  v 


40  SOCIAL  REFORM  AND  THE  CONSTITUTION 


All  these  cases,  it  is  to  be  remembered,  were  decided 
not  in  interpreting  the  power  of  Congress  to  regulate 
commerce,  but  in  reaching  a  determination  as  to  the 
extent  of  the  admiralty  jurisdiction  of  the  United 
States  courts.  They  are  not,  therefore,  authorities 
upon  the  question,  what  are  the  navigable  waters  of 
the  United  States  from  the  viewpoint  of  the  power  of 
Congress  to  regulate  navigation.1  But  the  Supreme 
Court  has  in  a  number  of  cases  expressed  the  opinion 
that  the  criterion  of  the  navigability  of  waters  is  the 
same  from  the  viewpoint  of  the  admiralty  jurisdiction 
of  the  courts  and  as  regards  the  navigation  which 
Congress  has  the  exclusive  power  to  regulate.  Thus 
in  The  Daniel  Ball 2  it  was  held  that  a  river  wholly 
within  the  limits  of  one  state,  but  emptying  into  Lake 
Michigan,  was  a  navigable  water  subject  to  the  regu¬ 
lation  of  Congress.3  Furthermore,  while  many  early 
cases  decided  that  a  state  might  permit  within  its 
own  limits  an  obstruction  in  a  navigable  river  (i.e.  a 
river  in  which  navigation  was  possible  and  which  was 
connected  with  navigable  waters)  where  Congress  had 
taken  no  action  with  regard  to  the  matter,4  the  state 
regulation  of  such  waters  is  now  regarded  as  inex¬ 
pedient,  and  the  whole  matter  has  been  regulated  by 
Congressional  legislation  passed  in  1890,  which  pro¬ 
hibits  “the  creation  of  any  obstruction,  not  affirma¬ 
tively  authorized  by  law,  to  the  navigable  capacity 
of  any  waters  in  respect  to  which  the  United  States 


1  Cf.  the  remarks  of  Chief  Justice  Taney  in  The  Genesee  Chief, 
12  Howard,  443,  452. 

2  10  Wallace,  557. 

3  Cf.  also  In  re  Garnett,  141  U.  S.  1,  12. 

4  Cf.  Escanaba  Company  v.  Chicago,  107  U.  S.  678. 


UNIFORM  COMMERCIAL  REGULATION 


41 


has  jurisdiction.”  This  law  has  been  interpreted  as 
preventing  not  merely  the  placing  of  an  obstruction, 
such  as  a  dam  or  a  bridge,  but  also  the  diversion  of 
water  so  as  to  interfere  with  the  navigability  of  navi¬ 
gable  waters.1 

We  may  therefore,  say  that  the  United  States  Con¬ 
gress  has  jurisdiction  over  all  waters,  over  which  navi¬ 
gation  with  foreign  countries  or  between  two  states 
is  possible  and,  probably,  only  over  such  waters.2 
This  being  the  case,  a  state  may  not,  even  in  the 
absence  of  action  by  Congress,  regulate  this  naviga¬ 
tion  3  except  as  to  purely  local  matters,  such  as  pilot¬ 
age,4  quarantine,5  port  regulations 6  and  wharfage.7 
Nor  may  it  exclude  from  the  privilege  of  navigating 
such  waters  any  vessel  authorized  by  the  United 
States  to  use  them,8  even  if  they  are  entirely  within 
the  state’s  limits.9 

The  cases  which  have  been  referred  to  partly 
answer  the  question,  What  is  foreign  or  interstate 
navigation  ?  Thus  in  The  Daniel  Ball  navigation 
upon  a  navigable  water  of  the  United  States,  where 
the  navigation  was  limited  to  two  places  within  the 

1  U.  S.  v.  Rio  Grande  Dam  and  Irrigation  Company,  174  U.  S.  690. 
The  recent  act  of  Congress  providing  for  the  formation  of  forest 
reserves  in  the  Eastern  States  is  based  upon  this  power  of  Congress 
to  regulate  navigation. 

2  Cf.  Leovy  v.  United  States,  177  U.  S.  621. 

3  Gibbons  v.  Ogden,  9  Wheaton,  1. 

4  Cooley  v.  Board,  12  Howard,  299. 

B  Morgan’s  Steamship  Company  v.  Louisiana  Board  of  Health, 
118  U.  S.  455. 

6  The  Brig  James  Gray  v.  The  Ship  John  Fraser,  21  Howard,  184. 

7  Packet  Company  v.  Catlettsburg,  105  U.  S.  559. 

8  Gibbons  v.  Ogden,  supra. 

9  Harman  v.  Chicago,  147  U.  S.  396;  Moran  v.  New  Orleans,  112 
U.  S.  69. 


42  SOCIAL  REFORM  AND  THE  CONSTITUTION 


same  state,  was  held  to  be  subject  to  the  regulatory 
power  of  Congress.1 

Some  of  the  cases  referred  to  also  help  us  in  the 
determination  of  the  meaning  of  the  power  to  regu¬ 
late,  certainly  so  far  as  it  is  exercised  with  regard  to 
navigation.  In  the  first  place,  we  may  say  that  the 
power  to  regulate  includes  the  power  to  prohibit. 
Thus  Congress  has,  without  objection  and  for  many 
years,  prohibited  all  vessels  not  of  American  registry 
from  engaging  in  the  coasting  trade  of  the  United 
States.  The  constitutionality  of  such  action  has  not 
been  questioned  and  is  implied  in  the  decision  of  the 
case  of  The  Daniel  Ball.  Furthermore,  the  recognition 
of  the  constitutionality  of  the  Embargo  Act 2  proves 
that  regulation  includes  prohibition. 

In  the  second  place,  the  power  to  regulate  includes 
the  power  to  license,  and  Congress  has,  from  an  early 
period,  required  a  license  from  all  vessels  of  any  size 
engaged  in  the  navigation  of  the  navigable  waters  of 
the  United  States.  Its  action  in  this  respect  was 
approved  by  the  Supreme  Court  in  the  case  of  The 

1  Cf.  Lord  v.  Steamship  Company,  102  U.  S.  541,  in  which  navi¬ 
gation  over  the  Pacific  Ocean  between  the  ports  of  San  Francisco  and 
San  Diego,  both  in  the  state  of  California,  was  held  to  be  subject 
to  the  regulation  of  Congress;  and  Steamboat  Company  v.  Living¬ 
ston,  3  Co  wen,  713,  in  which  boats  plying  between  two  places  in  the 
same  state  were  held  to  be  subject  to  the  power  of  Congress.  Cf. 
also  United  States  v.  Ferry  Company,  21  Fed.  Rep.  331,  and  The 
Steamboat  Sunswick,  6  Benedict,  112.  Cf.  also  State  Tonnage  Tax 
Cases,  12  Wallace,  204,  which  held  that  the  states  may  not  impose 
tonnage  taxes  on  vessels  plying  between  two  ports  of  the  same  state, 
since  such  vessels,  if  plying  the  navigable  waters  of  the  United  States, 
are  enrolled  and  licensed  by  Congress. 

2  United  States  v.  The  William,  2  American  Law  Journal,  255 ;  ap¬ 
proved  in  Pennsylvanian.  Wheeling,  etc.,  Bridge  Company,  18 Howard, 
421,  239. 


UNIFORM  COMMERCIAL  REGULATION 


43 


Daniel  Ball,  also  referred  to,  where  a  libel  was  upheld 
against  a  vessel  to  recover  a  penalty  for  the  use  of 
the  vessel  on  the  navigable  waters  of  the  United  States 
without  the  license  required  by  act  of  Congress.1 

In  the  third  place,  Congress  has  the  right  to  regu¬ 
late  the  contractual  relations  of  persons  and  corpora¬ 
tions  engaged  in  navigation.  As  early  as  1790,  Con¬ 
gress  passed  an  act  providing  for  the  apprehension  of 
deserters  and  their  delivery  on  board  the  vessel  from 
which  they  had  deserted.  In  1872  such  desertion 
from  a  vessel  was  punished  by  forfeiture  of  wages  and 
by  imprisonment.  In  this  act  and  the  amendments 
thereto  careful  provision  was  made  for  the  protection 
of  seamen  engaged  in  foreign  commerce  against  the 
frauds  and  cruelty  of  masters,  the  devices  of  boarding¬ 
house  keepers  and,  as  far  as  possible,  against  the  con¬ 
sequences  of  their  own  ignorance  and  improvidence. 
This  legislation  was  declared  to  be  constitutional  as 
an  exercise  of  the  power  to  regulate  commerce  in 
Patterson  v.  The  Bark  Eudora.2  Another  case,  in 
which  Congressional  regulation  of  the  contractual 
relations  of  persons  engaged  in  navigation  is  recognized 
as  proper,  is  that  of  Lord  v.  Steamship  Company,3 


1  Cf.  United  States  v.  Ferry  Company,  21  Fed.  Rep.  331 ;  The 
City  of  Salem,  38  Fed.  Rep.  762,  and  The  Oysters  Police  Steamers 
of  Maryland,  31  Fed.  Rep.  763.  In  this  last  case  police  steamers 
belonging  to  a  state  were  forced  to  have  their  boilers  examined  by 
an  inspector  of  the  United  States. 

2  190  U.  S.  169,  approving  Robertson  v.  Baldwin,  165  U.  S.  275. 
In  this  last  case  the  only  question  which  was  considered  was  whether 
the  act  of  Congress  was  constitutional  from  the  viewpoint  of  the 
thirteenth  amendment,  prohibiting  slavery  or  involuntary  servitude 
except  for  crime.  The  court  did  not  even  consider  whether  the  act 
was  proper  as  a  regulation  of  commerce  or  navigation. 

*  102  U.S.  541. 


44  SOCIAL  REFORM  AND  THE  CONSTITUTION 

where  an  act  of  Congress  fixing  the  liability  of  the 
owner  of  a  vessel  for  any  property  shipped  on  such 
vessel  was  held  to  apply,  as  a  regulation  of  inter¬ 
state  commerce,  to  a  shipment  on  a  steamer  plying 
between  San  Francisco  and  San  Diego,  both  ports  of 
California.  The  only  question  to  which  the  court 
devoted  any  attention  was  the  question  whether  the 
commerce  to  which  it  was  attempted  to  apply  the 
act  of  Congress  was  interstate  commerce  or  state 
commerce.  It  was  assumed  that  the  regulation  was 
proper  if  the  commerce  were  foreign  or  interstate.1 

We  may  therefore  say,  first,  that  Congress  has 
wide  powers  of  regulation  over  that  part  of  commerce 
which  is  known  as  navigation,  regardless  of  the  fact 
that  the  instrumentality  of  navigation  regulated  is 
made  use  of  merely  between  two  ports  in  the  same 
state;  and,  second,  that  these  powers  extend  to  the 
contractual  relations  of  the  persons,  both  shippers  and 
ship  owners  and  employers  and  employed,  engaged  in 
navigation.2 

In  the  exercise  of  these  powers,  Congress,  from  the 
beginning  of  our  history  as  a  nation,  has  assumed 
jurisdiction  of  the  navigable  waters  of  the  United 
States;3  has  insisted  on  a  license  from  all  vessels;4 

1  Cf.  In  re  Garnett,  141  U.  S.  1,  in  which  it  was  held  that  Congress 
might  constitutionally  regulate  the  liability  of  the  owners  of  vessels 
plying  between  two  points  in  a  state  situated  on  the  navigable  waters 
of  the  United  States. 

2  It  has  not  been  decided  that  Congress  has  the  power  to  regulate 
the  relations  of  seamen  not  engaged  in  foreign  or  interstate  navigation ; 
cf.  Patterson  v.  The  Bark  Eudora,  190  U.  S.  169,  where  the  court 
expressly  refuses  to  give  an  opinion  on  this  question. 

3  Even  in  opposition  to  the  wishes  of  some  particular  state ;  cf. 
Wisconsin  v.  Duluth,  96  U.S.  379. 

4  The  Daniel  Ball,  10  Wallace,  557. 


UNIFORM  COMMERCIAL  REGULATION 


45 


has  inspected  all  steam  vessels  navigating  such 
waters ; 1  has  formulated  rules  of  navigation ; 2  has 
regulated  the  contractual  relations  of  employers  and 
employed 3  and  of  owners  and  shippers,4  and  has 
punished  acts  incidental  to  navigation  which  tended 
to  obstruct  it.  In  United  States  v.  Coombs,5  the 
question  submitted  to  the  court  was  whether  a  circuit 
court  of  the  United  States  had  jurisdiction  to  punish 
one  who,  contrary  to  an  act  of  Congress,  had  plundered 
a  wrecked  vessel,  the  offense  having  been  committed 
above  high-water  mark.  Justice  Story,  who  delivered 
the  opinion,  held  that  the  court  could  not  base  its 
jurisdiction  on  the  clause  of  the  constitution  which 
provided  that  the  judicial  power  of  the  United  States 
should  extend  “to  all  cases  of  admiralty  and  maritime 
jurisdiction/’  but  that  it  did  have  jurisdiction  under 
the  clause  which  authorized  Congress  to  regulate  com¬ 
merce.  In  support  of  this  ruling  Justice  Story  said : — ■ 

“We  are  of  the  opinion  that,  under  the  clause  of  the  consti¬ 
tution  giving  power  to  Congress  ‘  to  regulate  commerce  with 
foreign  nations  and  among  the  several  states/  Congress  pos¬ 
sessed  the  power  to  punish  offences  of  the  sort  which  are 
enumerated  in  the  ninth  section  of  the  Act  of  1825,  now  under 
consideration.  The  power  to  regulate  commerce  includes  the 
power  to  regulate  navigation,  as  connected  with  the  commerce 
with  foreign  nations  and  among  the  states.  ...  It  does  not 
stop  at  the  mere  boundary  line  of  a  state,  nor  is  it  confined  to 
acts  done  on  the  water,  or  in  the  necessary  course  of  the  navi¬ 
gation  thereof.  It  extends  to  such  acts  done  on  land,  which 
interfere  with,  obstruct,  or  prevent  the  due  exercise  of  the 

1  The  Oyster  Police  Steamers,  etc.,  31  Fed.  Rep.  763. 

2  The  Delaware,  161  U.  S.  459;  The  New  York,  175  U.  S.  187. 

8  Patterson  v.  The  Bark  Eudora,  190  U.  S.  169. 

4  Ex  parte  Garnett,  141  U.  S.  1. 

6  12  Peters,  72. 


46  SOCIAL  REFORM  AND  THE  CONSTITUTION 


power  to  regulate  commerce  and  navigation  with  foreign 
nations  and  among  the  states.  Any  offense  which  thus  inter¬ 
feres  with,  obstructs,  or  prevents  such  commerce  and  navigation, 
though  done  on  land,  may  be  punished  by  Congress,  under  its 
general  authority  to  make  all  laws  necessary  and  proper  to 
execute  their  delegated  constitutional  powers.  No  one  can 
doubt  that  the  various  offenses  enumerated  in  the  ninth  section 
of  the  act  are  all  of  a  nature  which  tend  essentially  to  obstruct, 
prevent,  or  destroy  the  due  operations  of  commerce  and  navi¬ 
gation  with  foreign  nations  and  among  the  several  states. 
Congress  have,  in  a  great  variety  of  cases,  acted  upon  this 
interpretation  of  the  constitution,  from  the  earliest  period  after 
the  constitution.  .  .  .” 

In  a  word,  there  is  no  distinction  between  intra¬ 
state  and  interstate  navigation.  All  navigation  is 
subject  to  the  regulation  of  Congress.  Are  there  now 
any  reasons  why  the  rules  which  have  been  formu¬ 
lated  by  the  Supreme  Court  with  regard  to  naviga¬ 
tion  are  to  be  limited  in  their  application  when  applied 
to  interstate  and  foreign  commerce  by  land  instead  of 
by  water  ? 

There  are,  it  must  be  admitted,  two  provisions  in 
the  United  States  constitution  which  might  seem  to 
confer  upon  the  United  States  government  as  a  whole 
wider  powers  with  regard  to  commerce  by  water 
than  by  land.  Thus,  Art.  I,  Sec.  8,  Clause  io  gives 
Congress  power  “to  define  and  punish  piracies  and 
felonies  committed  on  the  high  seas,”  while  Art.  Ill, 
Sec.  2  provides  that  the  judicial  power  of  the 
United  States  “shall  extend  ...  to  all  cases  of  ad¬ 
miralty  and  maritime  jurisdiction.”  The  former 
clause  merely  gives  power  to  Congress  to  define  and 
punish  certain  kinds  of  crimes.  The  latter  clause, 
however,  is  believed  by  some  to  be  the  main  if  not  the 


UNIFORM  COMMERCIAL  REGULATION 


47 


sole  basis  of  the  power  of  Congress  to  regulate  naviga¬ 
tion.1 

It  is  difficult  to  ascertain  from  an  examination  of 
the  decisions  of  the  Supreme  Court  and  the  other 
United  States  courts  relative  to  the  power  of  Congress 
to  regulate  navigation,  what  is  the  accepted  judicial 
opinion  as  to  the  source  of  this  power,  i.e.  whether  it 
is  to  be  found  in  the  commerce  clause  or  in  the  ad¬ 
miralty  clause.  The  original  view  of  the  Supreme 
Court  seems  to  have  been  that  the  source  of  the 
power  to  regulate  navigation  was  to  be  found  in  the 
commerce  clause.  This  was  certainly  the  opinion  of 
Chief  Justice  Marshall.2  Not  only  did  he  make  the 
commerce  clause  the  basis  of  the  power  to  regulate 
navigation,  but  he  extended  this  power  so  as  to  in¬ 
clude  everything  incidental  to  foreign  and  interstate 
navigation.  Thus  he  said :  — 

“It  is  obvious  that  the  government  of  the  Union,  in  the  exer¬ 
cise  of  its  express  powers,  that,  for  example,  of  regulating  com¬ 
merce  with  foreign  nations  and  among  the  states,  may  use 
means  that  may  also  be  employed  by  a  state,  in  the  exercise  of 
its  acknowledged  powers ;  that,  for  example,  of  regulating  com¬ 
merce  within  the  state.  If  Congress  license  vessels  to  sail 
from  one  port  to  another  in  the  same  state,  the  act  is  supposed 
to  be,  necessarily,  incidental  to  the  power  expressly  granted  to 
Congress,  and  implies  no  claim  of  a  direct  power  to  regulate  the 
purely  internal  commerce  of  a  state,  or  to  act  directly  on  its 
system  of  police.” 

1  Thus  in  the  brief  of  the  defendants  in  the  Employers’  Liability 
Cases,  207  U.  S.  463,  the  statement  is  made  that  the  cases  cited  in  the 
brief  of  the  government  as  to  the  rule  of  damages  in  the  case  of  in¬ 
juries  on  vessels  do  not  fall  under  the  commerce  clause,  but  under  the 
admiralty  and  maritime  jurisdiction. 

2  Cf.  citation  from  Gibbons  v.  Ogden,  supra ,  p.  36, 


48  SOCIAL  REFORM  AND  THE  CONSTITUTION 


The  derivation  of  the  power  to  regulate  navigation 
from  the  commerce  clause  rather  than  from  the  ad¬ 
miralty  clause  was  probably  due  to  the  feeling  that  a 
wider  power  would  thus  be  secured  to  Congress.  For 
at  this  time  (1824)  it  was  believed  that  the  admiralty 
jurisdiction  was  limited  to  waters  affected  by  the  ebb 
and  flow  of  the  tide.  In  the  case  of  The  Thomas 
Jefferson,1  in  which  this  rule  was  laid  down,  Justice 
Story  said:  “Whether  under  the  power  to  regulate 
commerce  between  the  states,  Congress  may  not  ex¬ 
tend  the  remedy,  by  the  summary  process  of  the 
admiralty,  to  the  case  of  voyages  on  the  western 
waters,  it  is  unnecessary  for  us  to  consider.” 2  This 
seems  to  have  been  the  view  of  the  Supreme  Court 
as  late  as  1868.  In  that  year  Justice  Nelson,  in  up¬ 
holding  as  constitutional  an  act  of  Congress  which 
regulated  the  sale  and  mortgage  of  vessels  licensed  by 
the  United  States,  said :  — 

“  Congress  having  created,  as  it  were,  this  species  of  property 
and  conferred  upon  it  its  chief  value  under  the  power  given  in 
the  constitution  to  regulate  commerce,  we  perceive  no  reason 
for  entertaining  any  serious  doubt  but  that  this  power  may  be 
extended  to  the  security  and  protection  of  the  rights  and  title 
of  all  persons  dealing  therein.  The  judicial  mind  seems  to  have 
generally  taken  this  direction.”  3 * 

1 10  Wheaton,  428  (1825). 

2  Chief  Justice  Marshall  also  claimed  that  the  power  to  regulate 
commerce  would  include  commerce  on  streams  not  at  the  time  re¬ 
garded  as  navigable.  Gibbons  v.  Ogden,  at  p.  195.  Cf.  also  the 
opinion  of  Savage,  C.  J.,  in  North  River  Steamboat  Company  v. 
Livingston,  3  Cowen,  713,  at  p.  751. 

■-  5  White’s  Bank  v.  Smith,  7  Wallace,  646,  at  p.  656.  In  support  of 

the  statement  quoted  above,  the  court  cited:  The  Martha  Wash¬ 

ington,  25  Law  Reporter,  22;  Fontaine  v.  Beers,  19  Ala.  722; 
Mitchell  v.  Steelman,  8  Cal.  363 ;  Shaw  v.  McCandless,  36  Miss.  296. 


UNIFORM  COMMERCIAL  REGULATION 


49 


Finally,  in  Patterson  v.  The  Bark  Eudora,  as  has 
been  said,1  an  act  of  Congress  regulating  the  method 
of  hiring  seamen  was  spoken  of  as  a  regulation  of 
commerce ;  and  in  The  Lottawanna,  decided  in  1874, 2 
Justice  Bradley,  in  delivering  the  opinion  of  the  Su¬ 
preme  Court  as  to  what  was  the  maritime  law  which 
was  to  be  applied  in  the  case  at  bar,  expressed  the 
view  that  Congress  got  its  power  to  determine  the 
maritime  law  from  its  power  to  regulate  commerce. 
Justice  Bradley  said :  — 

“To  ascertain,  therefore,  what  the  maritime  law  of  this 
country  is,  it  is  not  enough  to  read  the  French,  German,  Italian, 
and  other  foreign  works  on  the  subject,  or  the  codes  which  they 
have  framed ;  but  we  must  have  regard  to  our  own  legal  history, 
constitution,  legislation,  usages,  and  adjudications  as  well. 
The  decisions  of  this  court  illustrative  of  these  sources,  and  giv¬ 
ing  construction  to  the  laws  and  constitution  are  especially  to 
be  considered ...  But  we  must  always  remember  that  the 
court  cannot  make  the  law ;  it  can  only  declare  it.  If  within  its 
proper  scope  any  change  is  desired  in  its  rules,  other  than  those 
of  procedure,  it  must  be  made  by  the  legislative  department. 
It  cannot  be  supposed  that  the  framers  of  the  constitution  con¬ 
templated  that  the  law  should  forever  remain  unalterable. 
Congress  undoubtedly  has  authority  under  the  commercial 
power,  if  no  other,  to  introduce  such  changes  as  are  likely  to  be 
needed.  The  scope  of  the  maritime  law  and  that  of  commercial 
regulations  are  not  coterminous,  it  is  true,  but  the  latter  em¬ 
braces  much  the  largest  portion  of  the  ground  covered  by  the 
former.  Under  it  Congress  has  regulated  the  registry,  enrol¬ 
ment,  license,  and  nationality  of  ships  and  vessels ;  the  method 
of  recording  bills  of  sale  and  mortgages  thereon ;  the  rights  and 
duties  of  seamen ;  the  limitations  of  the  responsibility  of  ship¬ 
owners  for  the  negligence  and  misconduct  of  their  captain  and 
crews ;  and  many  other  things  of  a  character  truly  maritime.” 3 

1  Supra ,  p.  43.  2  21  Wallace,  558. 

3  Ibid.,  pp.  576,  577.  Cf.  also  the  opinion  of  Justice  Story  in 
United  States  v.  Coombs,  12  Peters,  72  {supra,  p.  45),  claiming  for 
E 


50  SOCIAL  REFORM  AND  THE  CONSTITUTION 


The  statement  made  in  Steamboat  Sunswick1  is 
interesting  as  showing  what  was  the  view  of  the  lower 
courts,  as  late  as  1892,  as  to  what  power  was  exercised 
by  Congress  in  providing  for  the  inspection  of  steam¬ 
boats.  The  steamboat  concerned  was  a  ferryboat 
plying  between  Manhattan  and  Long  Island  —  both 
in  the  state  of  New  York  and  separated  by  the  East 
River,  an  arm  of  the  sea.  The  court  said :  — 

“Judicial  notice  may  be  taken  of  the  fact  that  Astoria  is  on 
an  island,  which  contains  a  large  population  and  has  numerous 
and  extensive  manufactories  and  large  cities  within  its  bounds ; 
that  its  inhabitants  have  commercial  relations  with  various 
states  of  the  Union,  and  use  the  ferryboats  as  the  ordinary 
means  of  communication  between  the  island  and  the  mainland ; 
that  upon  these  boats  large  quantities  of  merchandise  and  numer¬ 
ous  passengers,  destined  to  places  in  different  states,  are  neces¬ 
sarily  transported  in  the  ordinary  course  of  daily  business; 
and  that  it  is  principally  by  means  of  these  ferries  that  the  com¬ 
merce  between  Long  Island  and  other  states  is  carried  on.” 

The  court  admitted  that  there  was  no  evidence 
“  showing  a  transporting  on  this  ferryboat,  at  any 
particular  time,  of  either  merchandise  which  had 
begun  to  move  as  an  article  of  trade  from  one  state 
to  another,  or  of  passengers  having  a  similar  destina¬ 
tion, ”  but  it  concluded  that  the  boat  must  be  inspected 
as  provided  by  the  act  of  Congress.2 

In  the  meantime,  however,  the  law  had  developed 

Congress  the  power  under  the  commerce  clause  to  punish  the  plunder¬ 
ing  of  wrecks  even  where  the  offense  takes  place  above  high  water 
and  therefore  within  the  jurisdiction  of  a  state. 

1  6  Benedict,  112. 

2  This  opinion  should  be  compared  with  that  in  United  States 
v.  Burlington  and  Henderson  County  Ferry  Company,  21  Fed.  Rep. 
331,  decided  in  1888,  which  derives  the  power  of  Congress  to  provide 
for  the  inspection  of  vessels  from  the  admiralty  clause. 


UNIFORM  COMMERCIAL  REGULATION 


51 


in  two  directions.  On  the  one  hand,  the  admiralty 
jurisdiction  had  been  extended  to  all  waters  upon 
which  navigation  was  possible  between  points  in  a 
state  and  points  outside  of  a  state,  regardless  of  the 
nature  of  the  business  in  which  a  vessel  might  be 
engaged ; 1  and,  on  the  other  hand,  there  had  grown 
up  the  conception  of  an  intrastate  commerce  which 
was  not  subject  to  the  regulation  of  Congress.  That 
such  a  commerce  existed  was  perhaps  conceded  by 
Chief  Justice  Marshall,  but,  with  the  development  of 
states’  rights  ideas,  the  extent  of  this  field  was  re¬ 
garded  as  wider  than  the  great  chief'  justice  would 
probably  have  admitted.  It  was  apparently  felt  by 
the  Supreme  Court  that,  under  the  sway  of  such 
political  ideas,  the  conditions  of  legal  development 
were  different  from  those  which  were  believed  to  exist 
at  the  time  of  the  decision  in  Gibbons  v.  Ogden,  and 
that  greater  powers  of  regulation  over  navigation 
could  be  recognized  as  belonging  to  Congress  under 
the  admiralty  than  under  the  commerce  clause.  Thus 
in  the  case  of  The  Belfast,2  Justice  Clifford  said :  — 

“Unable  to  deny  that  admiralty  has  jurisdiction  over  marine 
torts,  though  the  voyage  is  between  ports  and  places  in  the  same 
state,  it  having  been  held  that  jurisdiction  in  those  cases  resulted 
from  the  fact  that  the  wrongful  act  was  committed  on  navigable 
waters,  the  advocates  of  the  more  restricted  jurisdiction  over 
maritime  contracts  set  up  a  distinction  and  contend  that  the 
admiralty  jurisdiction  over  such  contracts  is  limited  by  the 
power  granted  to  Congress  to  regulate  commerce.”3 

This  position  was  not  regarded  as  sound ;  and  the 
decision  of  the  court  was  that  a  state  could  not  im- 

1  Cf.  The  Commerce,  1  Black,  574. 

*  7  Wallace,  624  (1868).  3  Ibid.,  p.  641. 


52  SOCIAL  REFORM  AND  THE  CONSTITUTION 


pose  on  a  vessel,  licensed  by  the  United  States  and 
engaged  in  navigation  from  a  point  within  to  a  point 
without  the  state,  a  maritime  lien  for  goods  that 
were  to  be  carried  between  two  points  in  the  state 
and  were  lost  en  route.1 

Under  the  influence  of  these  ideas  and  with  the 
desire  to  uphold  the  action  of  Congress  in  its  regula¬ 
tion  of  navigation  and  to  exclude  state  action  there¬ 
upon,  —  for  it  was  believed  that  the  rules  for  all 
navigation  should  be  the  same,2  —  the  more  recent 
decisions  of  the  Supreme  Court  have  regarded  the 
admiralty  clause  in  the  constitution  as  not  merely 
vesting  jurisdiction  in  the  courts  of  the  United  States 
to  hear  cases,  but  as  also  giving  power  to  Congress  to 
issue  regulations. 

This  idea,  that  the  power  of  Congress  to  regulate 
navigation  may  be  based  on  some  other  clause  of  the 
constitution  than  that  which  empowers  Congress  to 
regulate  commerce,  is  hinted  at  in  The  Lottawanna,3 
decided  in  1874 ;  is  definitely  announced  in  Butler  v. 
Boston  Steamship  Company,4  decided  in  1888 ;  and 
receives  its  most  complete  and  forcible  expression  in 
In  re  Garnett,5 6  decided  in  1890.  In  this  case,  in 
which  a  law  of  Congress  limiting  the  liability  of 

1  Cf.  the  opinion  of  Justice  Miller  in  The  Bright  Star,  Woolw.  266. 

2  Cf.  opinion  of  Judge  Love  in  United  States  v.  Ferry  Company, 
21  Fed.  Rep.  331,  at  p.  340. 

3  Supra,  p.  49. 

4  130  U.  S.  527.  In  this  case  the  court  said:  “As  the  constitu¬ 

tion  extends  the  judicial  power  of  the  United  States  to  ‘all  cases  of 
admiralty  and  maritime  jurisdiction/  and  as  this  jurisdiction  is  held 
to  be  exclusive,  the  power  of  legislation  on  the  same  subject  must 
necessarily  be  in  the  national  legislature,  and  not  in  the  state  legis¬ 
latures”  (p.  557). 

6  141  U.  S.  1. 


UNIFORM  COMMERCIAL  REGULATION 


S3 


owners  of  vessels  plying  between  two  places  in  the 
same  state  was  upheld  as  constitutional,  the  court 
said :  — 


“It  is  unnecessary  to  invoke  the  power  given  to  Congress  to 
regulate  commerce  with  foreign  nations,  and  among  the  several 
states,  in  order  to  find  authority  to  pass  the  law  in  question. 
The  act  of  Congress  which  limits  the  liability  of  shipowners  was 
passed  in  amendment  of  the  maritime  law  of  the  country, 
and  the  power  to  make  such  amendments  is  coextensive  with 
that  law.  It  is  not  confined  to  the  boundaries  or  class  of  sub¬ 
jects  which  Emit  and  characterize  the  power  to  regulate  com¬ 
merce  ;  but,  in  maritime  matters,  it  extends  to  all  matters  and 
places  to  which  the  maritime  law  extends.” 1 

Are  we  now  to  accept  the  theory  that  these  deci¬ 
sions  as  to  the  power  of  Congress  to  regulate  naviga¬ 
tion  are  not  applicable  to  commerce  by  land ;  and,  as 
a  consequence,  are  we  to  conclude  that  the  Supreme 
Court,  abandoning  the  view  expressed  by  Chief  Jus¬ 
tice  Marshall,  has  committed  itself  to  the  idea  that 
the  power  to  regulate  interstate  commerce  by  land 
does  not  carry  with  it  the  power  to  regulate  all  matters 
of  intrastate  commerce  which  incidentally  affect  the 
commerce  subject  to  the  regulation  of  Congress  ? 
Such  a  conclusion  seems  both  unnecessary  and  im¬ 
proper.  The  utterances  of  the  court  are  not  decisive 
on  this  point.  All  that  they  decide  is  that  Congress 
does  not  derive  its  power  to  regulate  navigation  solely 
from  its  power  to  regulate  commerce.  The  court  has 
not  as  yet  been  called  upon  to  decide,  and  it  has 
therefore  not  decided,  that  matters  incidental  to 
interstate  commerce  by  land  are  not  subject  to  regu¬ 
lation  by  Congress  in  the  exercise  of  its  power  to 


1  Ibid.,  p.  12. 


54  SOCIAL  REFORM  AND  THE  CONSTITUTION 


regulate  commerce  among  the  states.  Indeed,  as 
will  be  pointed  out  later,  many  of  the  most  recent 
decisions  of  the  Supreme  Court  seem  to  accord  to 
Congress,  in  matters  which  fall  primarily  within  the 
competence  of  the  several  states,  but  which  are  inci¬ 
dental  to  interstate  commerce  by  land,  rights  similar 
to  those  claimed  by  Marshall  for  Congress  —  and,  as 
a  matter  of  fact,  since  exercised  by  it  —  with  regard 
to  such  commerce  by  water. 

It  may  therefore  be  said  that,  while  the  Supreme 
Court,  thanks  to  the  admiralty  clause,  has  found  it 
unnecessary  to  base  the  right  of  Congress  to  regulate 
navigation  solely  on  the  power  to  regulate  commerce, 
there  are  numerous  judicial  utterances  to  the  effect 
that  such  regulation  of  navigation  is,  as  a  matter  of 
fact,  a  regulation  of  commerce.  It  cannot  be  denied, 
however,  that  the  admiralty  clause  has  had  an  in¬ 
fluence,  particularly  in  recent  years,  in  extending  both 
the  jurisdiction  of  the  United  States  courts  and  the 
legislative  power  of  Congress  over  navigation. 


II.  The  Power  of  Congress  to  regulate  Trans¬ 
portation  by  Land 

Originally,  as  has  been  intimated,  Congress  did  not 
attempt  to  regulate  commerce  except  upon  the  navi¬ 
gable  waters  of  the  United  States.  Indeed,  we  find 
no  serious  attempt  to  regulate  commerce  by  land 
until  about  the  middle  of  the  nineteenth  century. 
Justice  Moody,  in  a  dissenting  opinion  in  the  Em¬ 
ployers’  Liability  cases,1  refers  to  this  matter  as 
follows :  — 


1  207  U.  S.  463. 


UNIFORM  COMMERCIAL  REGULATION 


55 


“It  is  said  that  Congress  has  never  before  enacted  legislation 
of  this  nature  for  the  government  of  interstate  commerce  on 
land,  though  it  has  for  the  government  of  such  commerce  upon 
the  water  and  for  the  government  of  foreign  commerce;  that 
on  the  contrary  the  relations  affected  have  been  controlled  by 
the  undoubted  power  of  the  states  to  govern  men  and  things 
within  their  respective  dominions;  and  that  this  omission  of 
Congress  is  of  controlling  significance.  The  fundamental  fallacy 
of  this  argument  is  that  it  misunderstands  the  nature  of  the 
constitution,  undervalues  its  usefulness,  and  forgets  that  its 
unchanging  provisions  are  adaptable  to  the  infinite  variety  of 
the  changing  conditions  of  our  national  life.  Surely  there  is 
no  statute  of  limitations  which  bars  Congress  from  the  exercise 
of  any  of  its  granted  powers,  nor  any  authority  save  that  of  the 
people  whom  it  represents,  which  may  with  propriety  challenge 
the  wisdom  of  its  choice  of  the  time  when  remedies  shall  first  be 
applied  to  what  it  deems  wrong.  It  cannot  be  doubted  that  the 
exercise  of  a  power  for  the  first  time  is  a  circumstance  to  be  con¬ 
sidered.  But  in  this  case  it  is  a  circumstance  whose  significance 
disappears  in  the  light  of  history.  Henry  Adams,  a  writer  of 
high  authority,  in  the  first  chapter  of  his  £  History  of  the  United 
States,’  has  drawn  a  vivid  picture  of  the  conditions  of  our  na¬ 
tional  life  at  the  beginning  of  the  nineteenth  century.  The 
center  of  population  was  near  Baltimore.  The  interior  was  al¬ 
most  impenetrable  except  by  the  waterways  and  two  wagon 
roads  from  Philadelphia  to  Pittsburg  and  from  the  Potomac  to 
the  Monongahela.  The  scattered  settlements  of  what  was  then 
the  Western  country  were  severed  from  the  seaboard  settle¬ 
ments  by  mountain  ranges,  and  there  was  little  connection  be¬ 
tween  the  two  almost  independent  peoples.  There  was  scarcely 
a  possibility  of  trade  between  the  states  except  along  the  sea- 
coast  and  over  the  dangerous  and  uncertain  rivers.  ‘The 
experience  of  mankind,’  says  the  author,  p.  7,  ‘proved  trade  to 
be  dependent  upon  water  communications,  and  as  yet  Americans 
did  not  dream  that  the  experience  of  mankind  was  useless  to 
them.’  We  need  not  look  beyond  these  conditions  for  an  ex¬ 
planation  why  Congress,  though  it  early  and  vigorously  exer¬ 
cised  its  power  of  legislation  over  foreign  commerce  and  inter¬ 
state  commerce  by  water,  left  it  unused  in  respect  to  interstate 


56  SOCIAL  REFORM  AND  THE  CONSTITUTION 


commerce  on  the  land.  As  population  multiplied,  bringing  the 
isolated  settlements  nearer  to  each  other,  wealth  increased,  creat¬ 
ing  a  wider  demand  for  commodities,  and  roads  and  bridges 
came  to  be  better  and  more  numerous,  doubtless  overland  com¬ 
merce  was  somewhat  stimulated.  But  the  iron  restrictions 
which  nature  had  placed  upon  land  transportation  remained 
constant  until  they  were  unloosed  by  the  operation  of  the  steam 
railroad.  The  system  of  steam  transportation  began  modestly 
by  the  construction  of  short  lines,  often  wholly  within  a  single 
state.  These  lines  were  lengthened  by  extensions  and  consoli¬ 
dations,  until  at  the  present  time  the  states  of  the  Union  are  all 
bound  together  by  a  network  of  interstate  railroads.  Their 
operation,  aided  by  the  quick  and  cheap  transmission  of  the 
mails,  and  the  communication  of  intelligence  by  electricity, 
has  transformed  the  commerce  of  the  country.  Interstate 
commerce  by  land,  once  so  slight  as  to  be  unworthy  of  the  atten¬ 
tion  of  the  national  legislature,  has  come  to  be  the  most  im¬ 
portant  part  of  all  trade,  and  it  is  not  too  much  to  say  that  the 
daily  needs  of  the  factory  and  the  household  are  no  longer 
dependent  upon  the  resources  of  the  locality,  but  are  largely 
supplied  by  the  products  of  other  states. 

“  It  was  not  reasonably  to  be  expected  that  a  phenomenon  so 
contrary  to  the  experience  of  mankind,  so  vast,  so  rapidly  devel¬ 
oping  and  changing,  as  the  growth  of  land  commerce  among  the 
states,  would  speedily  be  appreciated  in  all  its  aspects,  or  would 
at  once  call  forth  the  exercise  of  all  the  unused  power  vested  in 
Congress  by  the  commerce  clause  of  the  constitution.  Such  a 
phenomenon  demands  study  and  experience.  The  habit  of  our 
people,  accentuated  by  our  system  of  representative  govern¬ 
ment,  is  not  so  much  in  legislation  to  anticipate  problems  as  it 
is  to  deal  with  them  after  experience  has  shown  them  to  exist. 
So  Congress  has  exercised  its  power  sparingly,  step  by  step,  and 
has  acted  only  when  experience  seemed  to  it  to  require  action. 
A  description  of  its  action  in  this  respect  was  given  in  In  re  Debs, 
158  U.  S.  564,  where  it  was  said,  p.  579 :  ‘  Congress  has  exercised 
the  power  granted  in  respect  to  interstate  commerce  in  a  variety 
of  legislative  acts.  Passing  by  for  the  present  all  that  legislation 
in  respect  to  commerce  by  water,  and  considering  only  that 
which  bears  upon  railroad  interstate  transportation  (for  this  is 


UNIFORM  COMMERCIAL  REGULATION 


57 


the  specific  matter  involved  in  this  case),  these  acts  may  be  no¬ 
ticed:  First,  That  of  June  15,  1866,  c.  124,  14  Stat.  66,  carried 
into  the  Revised  Statutes  as  paragraph  5258,  which  provides: 
“  Whereas  the  constitution  of  the  United  States  confers  upon 
Congress,  in  express  terms,  the  power  to  regulate  commerce 
among  the  several  states,  to  establish  post  roads,  and  to  raise 
and  support  armies :  Therefore,  Be  it  enacted  by  the  Senate  and 
House  of  Representatives  of  the  United  States  of  America  in 
Congress  assembled,  That  every  railroad  company  in  the  United 
States  whose  road  is  operated  by  steam,  its  successors,  and  as¬ 
signs,  be,  and  is  hereby,  authorized  to  carry  upon  and  over  its 
road,  boats,  bridges,  and  ferries  all  passengers,  troops,  govern¬ 
ment  supplies,  mails,  freight,  and  property  on  their  way  from 
any  state  to  another  state,  and  to  receive  compensation  therefor, 
and  to  connect  with  roads  of  other  states  so  as  to  form  continu¬ 
ous  lines,  for  the  transportation  of  the  same  to  the  place  of  desti¬ 
nation.  Second.  That  of  March  3,  1873,  c.  252,  17  Stat.  584 
(Rev.  Stat.  §§  4386  to  4389)  which  regulates  the  transportation  of 
live  stock  over  interstate  railroads.  Third.  That  of  May  29, 
1884,  c.  60,  §  6,  23  Stat.  31, 32,  prohibiting  interstate  transporta¬ 
tion  by  railroads  of  live  stock  affected  with  any  contagious  or  in¬ 
fectious  disease.  Fourth.  That  of  February  4,  1887,  c.  104,  24 
Stat.  379,  with  its  amendments  of  March  2,  1889,  c.  382,  25  Stat. 
855,  and  February  10,  1891,  c.  128,  26  Stat.  743,  known  as  the 
‘Interstate  Commerce  Act/  by  which  a  commission  was  created 
with  large  powers  of  regulation  and  control  of  interstate  com¬ 
merce  by  railroads,  and  the  sixteenth  section  of  which  act  gives 
to  the  courts  of  the  United  States  power  to  enforce  the  orders 
of  the  commission.  Fifth.  That  of  October  1,  1888,  c.  1063, 
25  Stat.  501,  providing  for  arbitration  between  railroad  inter¬ 
state  companies  and  their  employees;  and,  Sixth,  the  act  of 
March  2, 1893,  c.  196,  27  Stat.  531,  requiring  the  use  of  automatic 
couplers  on  interstate  trains,  and  empowering  the  Interstate 
Commerce  Commission  to  enforce  its  provisions.” 

“  Since  this  decision  other  laws  more  fully  regulating  interstate 
commerce  on  land  have  been  enacted,  which  need  not  here  be 
stated.  They  show  a  constantly  increasing  tendency  to  exer¬ 
cise  more  fully  and  vigorously  the  power  conferred  by  the  com¬ 
merce  clause.  It  is  well  to  notice,  however,  that  Congress  has 


58  SOCIAL  REFORM  AND  THE  CONSTITUTION 


assumed  the  duty  of  promoting  the  safety  of  public  travel  by 
enacting  the  Safety  Appliance  Law;  an  act  to  require  reports 
of  casualties  to  employees  or  passengers  (31  Stat.  1446);  a 
resolution  directing  the  Interstate  Commerce  Commission  to 
investigate  and  report  on  the  necessity  for  block  signals  (34 
Stat.  838) ;  an  act  limiting  the  hours  of  service  of  employees 
and  the  act  under  consideration.  These  acts,  all  relating  to  in¬ 
terstate  transportation,  demonstrate  the  belief  of  Congress  that 
the  safety  of  interstate  travel  is  a  matter  of  national  concern, 
and  its  deliberate  purpose  to  increase  that  safety  by  laws  which 
it  deems  conducive  to  that  end.  I  think,  therefore,  that  we 
may  consider  whether  this  act  finds  authority  in  the  com¬ 
merce  clause  of  the  Constitution  without  embarrassment 
from  any  inferences  which  may  be  drawn  from  the  inaction  of 
Congress.”  1 

Let  us  now  endeavor  to  ascertain  what  has  been 
the  attitude  of  the  Supreme  Court  toward  the  most 
important  attempts  which  Congress  has  made  in 
recent  years  to  regulate  interstate  commerce  by  land, 
some  of  which  are  recapitulated  in  the  foregoing 
quotation.2 

The  power  of  Congress,  which  was  exercised  in  the 
passage  of  the  Interstate  Commerce  Acts,  to  provide 
that  charges  by  interstate  carriers  shall  be  reasonable 
and  just,  and  that  individual  discriminations  in  the 
matter  of  rates  shall  not  be  made  by  such  carriers, 
has  been  upheld  in  a  series  of  cases.  In  some,  the 
Supreme  Court  has  upheld  orders  of  the  Interstate 
Commerce  Commission  (which  was  established  by  the 
act)  requiring  carriers  to  refrain  from  greater  charges 

1  207  U.  S.  463,  at  pp.  521-525. 

2  Inasmuch  as  the  Anti-Trust  Act  of  1890,  which  may  be  added  to 
the  list  of  the  acts  of  Congress  regulating  interstate  commerce,  at¬ 
tempted  to  regulate  commerce  in  quite  a  different  way  from  that  in 
which  navigation  had  up  to  that  time  been  regulated,  a  consideration 
of  this  act  will  be  for  the  moment  deferred. 


UNIFORM  COMMERCIAL  REGULATION 


59 


for  carrying  merchandise  to  one  specified  place  than 
to  another.1  In  others,  criminal  punishments  have 
been  imposed  upon  interstate  carriers  for  having 
made  individual  discriminations  by  the  giving  of 
rebates.2 

The  act  of  Congress  providing  for  safety  appliances 
has  been  several  times  before  the  Supreme  Court.  In 
these  cases  the  question  of  constitutionality  seems  not 
to  have  been  raised ;  but  in  applying  the  provisions 
of  the  act  to  the  particular  facts  of  each  case,  the 
court  has  implicitly  upheld  its  constitutionality.  The 
act  in  question  provided  that  after  January  i,  1898, 
it  should  “be  unlawful  for  any  common  carrier  en¬ 
gaged  in  interstate  commerce  by  railroad  to  use  on 
its  line  any  locomotive  engine  engaged  in  moving 
interstate  traffic  not  equipped  with  a  power  driving 
wheel  brake  .  .  .  (or)  to  haul  or  permit  to  be  hauled 
or  use  on  its  line  any  car  used  in  moving  interstate 
traffic  not  equipped  with  couplers  coupling  auto¬ 
matically  by  impact  (etc.)  .  .  .  (and)  that  any  em¬ 
ployee  of  any  such  common  carrier  who  may  be  in¬ 
jured  by  any  locomotive  car  or  train  in  use  contrary 
to  the  provision  of  this  Act  shall  not  be  deemed  to 
have  assumed  the  risk  thereby  occasioned,”  although 
continuing  in  the  employment  of  such  carrier  after 
the  unlawful  use  of  such  locomotive  car  or  train  had 
been  brought  to  his  knowledge. 

In  the  case  of  Johnson  v.  Southern  Pacific  Com- 

1  Cincinnati,  New  Orleans,  and  Texas  Pacific  Railway  v.  Interstate 
Commerce  Commission,  162  U.  S.  184.  Cf.  also  Interstate  Commerce 
Commission  v.  Brimson,  154  U.  S.  447,  473,  which  distinctly  and 
expressly  upholds  the  constitutionality  of  the  act. 

2  New  York  Central  Railroad  Company  v.  United  States,  212  U.  S. 
481. 


6o  SOCIAL  REFORM  AND  THE  CONSTITUTION 


pany,1  the  claim  of  an  injured  employee  for  damages 
was  met  by  the  objection  that,  the  dining  car,  in 
coupling  which  the  accident  occurred,  was  empty  and 
had  not  actually  started  upon  its  trip ;  but  the  court 
overruled  this  objection  on  the  ground  that  the  car 
“had  been  constantly  used  for  several  years  to  fur¬ 
nish  meals  to  passengers  between  San  Francisco  and 
Ogden,  and  for  no  other  purposes.  On  the  day  of  the 
accident  the  east-bound  train  was  so  late  that  it  was 
found  that  the  car  could  not  reach  Ogden  in  time  to 
return  on  the  west-bound  train,  and  it  was  therefore 
dropped  off  at  Promontory  to  be  picked  up  by  that 
train  as  it  came  along  that  evening.”  The  court  on 
this  ground  overturned  a  verdict  given  for  the  de¬ 
fendant,  and  ordered  a  new  trial. 

In  Schlemmer  v.  Buffalo,  Rochester,  and  Pittsburg 
Railroad  Company,2  the  main  question  was  as  to  the 
meaning  of  that  clause  in  the  act  which  provides  that 
the  employee  “shall  not  be  deemed  to  have  assumed 
the  risk”  by  reason  of  his  knowledge  of  a  violation  of 
the  act  by  the  company.  The  Supreme  Court  of 
Pennsylvania  had  affirmed  a  judgment  of  nonsuit  on 
the  ground  of  contributory  negligence  on  the  part  of 
the  deceased.  This  judgment  was  reversed  by  the 
Supreme  Court  of  the  United  States,  because,  in  its 
opinion,  the  Pennsylvania  court  had  refused  to  give 
effect  to  the  provision  of  the  act  which  covered  this 
point. 

In  1906  Congress  attempted  to  exercise  its  power 
of  regulating  foreign  and  interstate  commerce  by  pro¬ 
viding  that  every  carrier  engaged  in  such  commerce 
should  be  liable  to  “any  of  its  employees”  and,  in 
1 196  U.  S.  1.  2  205  U.  S.  1. 


UNIFORM  COMMERCIAL  REGULATION 


6l 


case  of  the  death  of  an  employee,  to  his  widow  and 
children,  etc.,  for  all  damages  caused  by  the  negligence 
of  any  of  its  officers,  and  that  the  fact  that  the  em¬ 
ployee  was  guilty  of  contributory  negligence  should 
not  of  itself  bar  recovery.  In  the  Employers’  Lia¬ 
bility  cases 1  this  law  was  declared  to  be  unconstitu¬ 
tional  because  it  in  terms  applied  to  “any  of  its  (the 
carrier’s)  employees”  and  thus  affected  employees  not 
engaged  in  interstate  and  foreign  commerce.  This 
decision  was  reached,  notwithstanding  the  fact  that  in 
both  suits  the  plaintiff’s  deceased  was  at  the  time  of 
his  death  admittedly  “serving  as  a  fireman  on  a  loco¬ 
motive  actually  engaged  in  moving  an  interstate  com¬ 
merce  train.”  It  was  contended  by  the  defendants 
in  these  cases  that  the  act  was  unconstitutional  upon 
another  ground,  viz.  because  it  attempted  to  regulate 
the  relations  of  master  and  servant,  which  were  not 
fairly  parts  of  interstate  commerce.  This  contention 
was  declared  to  be  unsound.  Justice  White,  in  deliver¬ 
ing  the  opinion  of  the  court,  said :  — 

“We  may  not  test  the  power  of  Congress  to  regulate  com¬ 
merce  solely  by  abstractly  considering  the  particular  subject  to 
which  a  regulation  relates,  irrespective  of  whether  the  regulation 
in  question  is  one  of  interstate  commerce.  On  the  contrary, 
the  test  of  power  is  not  merely  the  matter  regulated,  but  whether 
the  regulation  is  directly  one  of  interstate  commerce,  or  is  em¬ 
braced  within  the  grant  conferred  on  Congress  to  use  all  lawful 
means  necessary  and  appropriate  to  the  execution  of  the  power  to 
regulate  commerce.  We  think  the  unsoundness  of  the  conten¬ 
tion,  that  because  the  act  regulates  the  relation  of  master  and 
servant,  it  is  unconstitutional,  because  under  no  circumstances 
and  to  no  extent  can  the  regulation  of  such  subject  be  within 
the  grant  of  authority  to  regulate  commerce,  is  demonstrable. 


1  207  U.  S.  463. 


62  SOCIAL  REFORM  AND  THE  CONSTITUTION 


We  say  this  because  we  fail  to  perceive  any  just  reason  for  holding 
that  Congress  is  without  power  to  regulate  the  relation  of  master 
and  servant,  to  the  extent  that  regulations  adopted  by  Congress 
on  that  subject  are  solely  confined  to  interstate  commerce,  and 
therefore  are  within  the  grant  to  regulate  that  commerce,  or 
within  the  authority  given  to  use  all  means  appropriate  to  the 
exercise  of  the  powers  conferred.  To  illustrate :  Take  the  case 
of  an  interstate  railway  train,  that  is,  a  train  moving  in  inter¬ 
state  commerce,  and  the  regulation  of  which,  therefore,  is,  in  the 
nature  of  things,  a  regulation  of  such  commerce.  It  cannot  be 
said  that  because  a  regulation  adopted  by  Congress  as  to  such 
train  when  so  engaged  in  interstate  commerce  deals  with  the 
relation  of  the  master  to  the  servants  operating  such  train,  or  the 
relations  of  the  servants  engaged  in  such  operation  between 
themselves,  that  it  is  not  a  regulation  of  interstate  commerce. 
This  must  be,  since  to  admit  the  authority  to  regulate  such  train, 
and  yet  to  say  that  all  regulations  which  deal  with  the  relation  of 
master  and  servants  engaged  in  its  operation  are  invalid  for 
want  of  power,  would  be  but  to  concede  the  power  and  then  to 
deny  it,  or  at  all  events  to  recognize  the  power  and  yet  to  render 
it  incomplete. 

“  Because  of  the  reasons  just  stated  we  might  well  pass  from 
the  consideration  of  the  subject.  We  add,  however,  that  we 
think  the  error  of  the  proposition  is  shown  by  previous  decisions 
of  this  court.  Thus  the  want  of  power  in  a  state  to  interfere 
with  an  interstate  commerce  train,  if  thereby  a  direct  burden  is 
imposed  upon  interstate  commerce,  is  settled  beyond  question. 
Mississippi  R.  R.  Com.  v.  Illinois  Central  R.R.,  203  U.  S.  335, 343, 
and  cases  cited;  Atlantic  Coast  Line  R.R.  v.  Wharton  et  al ., 
Railroad  Commissioners,  207  U.  S.  328.  And  decisions  cited  in 
the  margin,  holding  that  state  statutes  which  regulated  the  rela¬ 
tion  of  master  and  servant  were  applicable  to  those  actually 
engaged  in  an  operation  of  interstate  commerce,  because  the 
state  power  existed  until  Congress  acted,  by  necessary  implica¬ 
tion  refute  the  contention  that  a  regulation  of  the  subject,  con¬ 
fined  to  interstate  commerce,  when  adopted  by  Congress,  would 
be  necessarily  void  because  the  regulation  of  the  relation  of 
master  and  servant  was,  however  intimately  connected  with  in¬ 
terstate  commerce,  beyond  the  power  of  Congress.  And  a  like 


UNIFORM  COMMERCIAL  REGULATION  63 

conclusion  also  persuasively  results  from  previous  rulings  of  this 
court  concerning  the  act  of  Congress,  known  as  the  Safety  Ap¬ 
pliance  Act.  Johnson  v.  Southern  Pacific  Co.,  196  U.  S.  1 ; 
Schlemmer  v.  Buffalo,  Rochester,  etc.,  Ry.,  205  U.  S.  1.” 

At  least  four  of  the  members  of  the  court  con¬ 
curred  in  Justice  White’s  view  that  Congress  has  the 
power  to  regulate  the  relations  of  masters  and  servants 
engaged  in  interstate  commerce.  It  may  therefore  be 
said  that  Congress  may  regulate  many,  if  not  all,  of 
the  legal  relations  of  persons  engaged  in  interstate 
transportation  with  their  employees,  where  such  rela¬ 
tions  arise  out  of  the  act  of  transportation  and  where 
such  employees  are  directly  engaged  in  interstate  or 
foreign  commerce. 

The  recent  case  of  Atlantic  Coast  Line  v.  Riverside 
Mills  1  recognizes  that  Congress  has  the  power  also 
to  regulate  some,  if  not  all,  of  the  legal  relations  of 
persons  engaged  in  interstate  and  foreign  commerce 
with  the  public  which  makes  use  of  their  services.  In 
this  case  the  court  held  constitutional  an  act  of  Con¬ 
gress  which  provided  that  any  common  carrier  receiv¬ 
ing  property  for  transportation  from  a  point  in  one 
state  to  a  point  in  another  should  issue  a  bill  of  lading 
therefor,  and  should  be  liable  to  the  lawful  holder 
thereof  for  any  loss,  damage,  or  injury  to  such  property 
caused  by  it  or  by  any  common  carrier  to  which  such 
property  might  be  delivered,  and  that  such  common 
carrier  should  not  be  permitted  to  exempt  itself  from 
such  liability.  The  court  held,  first,  that  this  act 
was  a  regulation  of  interstate  commerce,  and,  second, 
that  it  did  not  violate  the  fifth  amendment  in  depriv¬ 
ing  a  person  of  his  property  or  liberty  without  due 

1  31  S.  C.  R.  164. 


64  SOCIAL  REFORM  AND  THE  CONSTITUTION 


process  of  law.  One  of  the  reasons  which  apparently 
led  the  court  to  reach  its  decision  was  that  the  carrier 
could  have,  so  far  as  concerned  the  act  of  Congress, 
escaped  from  the  liability  by  refusing  to  accept  goods 
for  shipment  designated  for  a  point  beyond  its  own 
line,  and  that  by  accepting  the  goods  and  delivering 
them  to  another  carrier  it  made  such  carrier  its  agent, 
and  therefore  made  itself  responsible  for  the  acts  of 
such  agent. 

To  the  contention  that  the  carrier  was  unconstitu¬ 
tionally  deprived  of  its  liberty  to  contract  by  being 
forbidden  to  exempt  itself  from  liability,  the  court 
answered  “that  there  is  no  such  thing  as  absolute 
freedom  of  contract  .  .  .  the  power  to  make  con¬ 
tracts  may  in  all  cases  be  regulated  as  to  form,  evi¬ 
dence,  and  validity  as  to  third  persons.  The  power 
of  government  extends  to  the  denial  of  liberty  of  con¬ 
tract,  to  the  extent  of  forbidding  or  regulating  every 
contract  which  is  reasonably  calculated  to  injuriously 
affect  the  public  interests.”  1 

As  yet,  however,  we  have  not  ascertained  whether 
the  power  of  regulation,  possessed  by  Congress,  may 
be  extended  so  as  to  embrace  purely  intrastate  com¬ 
merce  by  land  where  the  regulation  of  that  commerce 
is  necessary  in  order  that  the  regulation  of  interstate 
commerce  may  be  effective. 

This  question  has  been  considered,  if  not  decided, 
by  the  Supreme  Court  in  the  most  recent  cases  upon 

1  Somewhat  the  same  principle  was  involved  in  Interstate  Com. 
Com.  v.  Ill.  Cent.  R.  R.  (215  U.  S.  452)  and  Same  v.  Chicago  and 
Alton  R.  R.  (ibid.,  479)  which  upheld  the  power  of  the  Interstate 
Commerce  Commission,  proceeding  under  an  act  of  Congress  to 
regulate  the  distribution  of  coal  cars  in  times  of  car  shortage  in  order 
to  prevent  unjust  preference  or  undue  discrimination. 


UNIFORM  COMMERCIAL  REGULATION  65 


the  power  of  Congress  to  regulate  interstate  commerce. 
The  Employers’  Liability  cases  would  seem  to  hold 
that  the  mere  fact  that  one  is  an  employee  of  a  person 
engaged  in  interstate  commerce  is  not  sufficient  to 
justify  the  regulation  by  Congress  of  his  relations 
with  his  employer.  In  order  to  be  subject  to  the 
direct  regulatory  power  of  Congress,  the  employee  him¬ 
self  must  be  actually  engaged  in  interstate  commerce. 
This  would  seem  to  be  admitted  by  most  of  the 
judges  who  dissented  from  the  majority  decision  in 
this  case.  If  this  principle  is  permanently  adopted 
by  the  Supreme  Court,  it  will  have  the  effect  of  taking 
out  of  the  direct  regulatory  power  of  Congress  all 
the  employees  of  manufacturing  corporations  devoting 
their  attention  strictly  to  manufacturing.  The  con¬ 
tractual  and  other  private  legal  relations  of  such  em¬ 
ployees  may  not  be  the  subject  of  Congressional  regu¬ 
lation.  This  view  of  the  law  is  corroborated  by 
such  cases  as  Mugler  v,  Kansas,1  Powell  v.  Pennsyl¬ 
vania,2  and  United  States  v.  E.  C.  Knight  Company,3 
which  hold  that  it  is  in  the  power  of  the  states  and 
not  in  the  power  of  Congress  to  regulate  manufactur¬ 
ing  by  determining,  for  example,  what  articles  may  be 
manufactured  in  the  several  states.  It  has  also  been 
expressly  held  that  neither  life  insurance,  nor  insur¬ 
ance  against  fire,  nor  insurance  against  the  perils  of 
the  sea  is  included  within  the  constitutional  concep¬ 
tion  of  commerce.4  It  is  to  be  remembered,  however, 
that  these  cases  were  decided  with  regard  to  the 

1  123  U.  S.  623.  4 127  U.  S.  678.  3  156  U.  S.  1. 

4  New  York  Life  Insurance  Company  v.  Cravens,  178  U.  S.  389; 
Insurance  Company  v.  Dunham,  11  Wallace,  1;  Hooper  v.  Cali¬ 
fornia,  155  U.  S.  648. 


66  SOCIAL  REFORM  AND  THE  CONSTITUTION 


power,  not  of  Congress,  but  of  the  states.  They 
might,  therefore,  be  considered  as  recognizing  a  power 
in  the  states  to  issue  in  the  absence  of  action  by 
Congress  local  regulations  on  a  subject  not  at  the 
time  requiring  uniform  treatment.  The  recent  deci¬ 
sion  in  International  Textbook  Company  v.  Pigg,1 
in  which  education  by  correspondence  between  two 
states  was  held  to  be  interstate  commerce,  goes  far  in 
abandoning  the  theory  upon  which  interstate  insur¬ 
ance  was  held  not  to  be  interstate  commerce. 

In  the  Employers’  Liability  cases,  further,  the  Su¬ 
preme  Court  did  not  determine  whether  Congress,  in 
order  to  regulate  effectively  the  technical  operations 
of  carriers  engaged  in  interstate  commerce,  has  the 
right  incidentally  to  regulate  intrastate  commerce. 
In  one  of  the  cases  arising  under  the  Safety  Appliances 
Acts,  however,  it  decided  that  a  car  ordinarily  used  in 
interstate  commerce  was  an  instrument  of  such  com¬ 
merce,  although  standing  still  and  not  having  com¬ 
menced  its  journey.2  It  has  also  held  that  a  rate 
made  by  a  railway  from  a  point  within  a  state  to  a 
point  without  a  state  is  an  interstate  rate,  and  that 
no  state  may  regulate  that  portion  of  it  which  may 
be  charged  for  the  journey  within  the  state ; 3  and 
further,  that  this  rate  is  subject,  as  an  interstate  rate, 
to  the  jurisdiction  of  the  Interstate  Commerce  Com¬ 
mission.4  Two  recent  cases 5  tend  even  more  strongly 

1  217  U.  S.  91.  2  Johnson?;.  Southern  Pacific  Company,  205  U.  S.  1. 

3  Wabash,  St.  Louis,  and  Pacific  Railway  Company  v.  Illinois,  118 
U.  S.  557,  overruling  Peik  v.  Chicago  and  Northwestern  Railway 
Company,  94  U.  S.  164. 

4  Cincinnati,  New  Orleans,  and  Texas  Pacific  Railway  v.  Inter¬ 
state  Commerce  Commission,  162  U.  S.  184. 

6  Western  Union  Telegraph  Company  v.  Kansas,  216  U.  S.  1  and 
the  Pullman  Company  v.  Kansas,  ibid.,  56. 


UNIFORM  COMMERCIAL  REGULATION  67 


in  the  same  direction.  In  these  cases  the  state  of 
Kansas  attempted  to  impose  upon  foreign  corpora¬ 
tions  engaged  in  interstate  commerce  a  tax  for  the 
state  school  fund  upon  their  entire  capital  stock  for 
the  privilege  of  doing  intrastate  commerce.  The  Su¬ 
preme  Court  held  the  law  unconstitutional.  Justice 
Harlan,  who  delivered  the  opinion  of  the  court  in 
both  cases,  said :  — 

“The  statutory  requirement  that  the  telegraph  company 
shall,  as  a  condition  of  its  right  to  engage  in  local  business  in 
Kansas,  pay  into  the  state  school  fund  a  given  per  cent  of  its 
authorized  capital,  representing  all  its  business  and  property 
everywhere,  is  a  burden  on  the  company’s  interstate  commerce 
and  its  privilege  to  engage  in  that  commerce,  in  that  it  makes 
both  such  commerce  as  conducted  by  the  company  and  its  prop¬ 
erty  outside  of  the  state  contribute  to  the  support  of  the  state’s 
schools.  .  .  .  We  cannot  fail  to  recognize  the  intimate 
connection  which  at  this  day  exists  between  the  interstate  busi¬ 
ness  done  by  interstate  companies  and  the  local  business  which, 
for  the  convenience  of  the  people,  must  be  done,  or  can  generally 
be  better  and  more  economically  done,  by  such  interstate  com¬ 
panies  rather  than  by  domestic  companies  organized  to  conduct 
only  local  business.” 

In  reaching  these  conclusions  the  Supreme  Court 
would  seem  to  have  been  governed  by  the  same  ideas 
which  it  had  in  mind  in  deciding  cases  relative  to  the 
power  of  Congress  to  regulate  navigation.  Thus  in 
the  case  of  The  Daniel  Ball,1  to  which  several  refer¬ 
ences  have  already  been  made,  the  court  upheld  the 
action  of  the  United  States  government  in  demanding 
a  license  of  a  steamboat  plying  navigable  waters  —  in 
this  case  a  river  wholly  within  a  state  —  between  two 


1  10  Wallace,  557. 


68  SOCIAL  REFORM  AND  THE  CONSTITUTION 


points  in  the  same  state.  The  decision  was  based 
upon  the  grounds :  first,  that  the  vessel  was  engaged 
in  navigating  the  waters  of  the  United  States;  and 
second,  that  she  was  carrying  merchandise  destined 
for  points  out  of  the  state,  although  it  was  admitted 
that  she  “did  not  run  in  connection  with,  or  in  con¬ 
tinuation  of,  any  line  of  vessels  or  railway  leading  to 
other  states.”  In  rendering  this  decision  the  court 
said :  — 


“The  fact  that  several  different  and  independent  agencies 
are  employed  in  transporting  the  commodity,  some  acting  en¬ 
tirely  in  one  state,  and  some  acting  through  two  or  more  states, 
does  in  no  respect  affect  the  character  of  the  transaction.  To  the 
extent  in  which  each  agency  acts  in  that  transportation,  it  is 
subject  to  the  regulations  of  Congress.  It  is  said  that  if  the 
position  here  asserted  be  sustained,  there  is  no  such  thing  as  the 
domestic  trade  of  a  state ;  that  Congress  may  take  the  entire  con¬ 
trol  of  the  commerce  of  the  country,  and  extend  its  regulations 
to  the  railroads  within  a  state  on  which  grain  or  fruit  is  trans¬ 
ported  to  a  distant  market.  We  answer  that  the  present  case 
relates  to  transportation  on  the  navigable  waters  of  the  United 
States,  and  we  are  not  called  upon  to  express  an  opinion  upon  the 
power  of  Congress  over  interstate  commerce  when  carried 
on  by  land  transportation.  And  we  answer,  further,  that  we  are 
unable  to  draw  any  clear  and  distinct  line  between  the  authority 
of  Congress  to  regulate  an  agency  employed  in  commerce  be¬ 
tween  the  states,  when  that  agency  extends  through  two  or  more 
states  and  when  it  is  confined  in  its  action  entirely  within  the 
limits  of  a  single  state.  If  its  authority  does  not  extend  to  an 
agency  in  such  commerce,  when  that  agency  is  confined  within 
the  limits  of  a  state,  its  entire  authority  over  interstate  com¬ 
merce  may  be  defeated.  Several  agencies  combining,  each 
taking  up  the  commodity  transported  at  the  boundary  line 
at  one  end  of  a  state,  and  leaving  it  at  the  boundary  line 
at  the  other  end,  the  federal  jurisdiction  would  be  entirely 
ousted,  and  the  constitutional  provision  would  become  a  dead 
letter.” 


UNIFORM  COMMERCIAL  REGULATION  69 


In  a  recent  circuit  court  of  appeals  case,1  it  was 
held  that  the  rule  laid  down  in  The  Daniel  Ball  should 
be  applied  to  interstate  commerce  by  land,  and  that  a 
car  which  was  used  to  aid  in  the  transport  of  goods 
from  a  point  outside  of  the  state  to  a  point  within 
the  state  was  engaged  in  interstate  commerce,  although 
the  car  itself,  running  on  a  narrow-gauge  road  which 
ended  in  the  state,  could  not  go  outside  of  the  state. 
The  company  was  accordingly  punished  for  not 
equipping  such  car  with  automatic  couplers  in  accord¬ 
ance  with  the  act  of  Congress.2  The  Supreme  Court, 
however,  has  not  yet  decided  whether  a  car  which  is 
admittedly  engaged  only  in  intrastate  commerce  is 
subject  to  the  regulatory  power  of  Congress,  e.g.  in 
the  matter  of  safety  appliances,  where  it  is  coupled 
to  a  car  engaged  in  interstate  commerce.  If  such  a 
car  is  not  regarded  as  subject  to  the  power  of  Con¬ 
gress,  the  exercise  by  that  body  of  its  power  to  regu¬ 
late  interstate  commerce  will  be  rendered  singularly 
ineffective;  for  automatic  coupling  by  impact,  as 
prescribed  by  Congress,  is  naturally  impossible  when 
one  of  the  cars  is  not  equipped  with  an  automatic 
coupler;  and,  unless  cars  are  actually  coupled  auto¬ 
matically  by  impact,  the  purpose  of  the  regulation  of 
Congress,  viz.  the  protection  of  the  safety  of  trainmen 
engaged  in  interstate  commerce,  will  not  be  realized. 

1  United  States  v.  Colorado  and  Northwestern  Railway  Company, 
85  C.  C.  A.  27. 

2  The  contrary  view,  however,  seems  to  have  been  adopted  in 
United  States  v.  Geddes,  65  C.  C.  A.  320.  Further,  it  has  been 
decided  by  the  Supreme  Court  that  a  steam  shovel,  so  arranged  as 
to  travel  on  its  own  wheels  by  rail,  and  being  hauled  from  a  point  in 
one  state  to  a  point  in  another  state,  is  a  car  engaged  in  interstate 
commerce.  Schlemmer  v.  Buffalo,  etc.,  Railway  Company,  205 
U.  S.  1. 


70  SOCIAL  REFORM  AND  THE  CONSTITUTION 

For  this  reason  a  lower  state  court  has  held  that  the 
Safety  Appliance  Acts  forbid  coupling  such  a  car  to 
an  interstate  car  in  any  way  except  by  impact.1 

It  would  seem,  therefore,  to  be  true  that  most 
regulations  which  might  be  passed  as  to  the  technical 
operations  of  railways  engaged  in  interstate  commerce 
would  lose  greatly  in  effectiveness  if  it  were  not  pos¬ 
sible  to  apply  them  also  to  vehicles  of  commerce 
engaged  only  in  state  commerce.  Thus,  if  power 
brakes  make  for  the  safety  of  transportation,  their 
absence  in  the  case  of  cars  exclusively  engaged  in 
state  commerce  would  increase  the  dangers  of  inter¬ 
state  commerce  where  that  was  carried  on  over  a 
railway  engaged  in  both  kinds  of  commerce.  From 
many  points  of  view,  accordingly,  effective  regulation 
of  interstate  commerce  would  seem  necessarily  to  in¬ 
volve  the  regulation  of  commerce  which,  when  con¬ 
sidered  alone,  is  primarily  and  strictly  state  commerce. 
Where  this  is  the  case,  it  would  seem  that  the  power 
to  regulate  state  commerce  as  incident  to  the  effective 
regulation  of  interstate  commerce  should  be  recog¬ 
nized  as  possessed  by  Congress.  Such  would  seem 
also  to  be  the  law,  if  the  rules  which  have  been  ap¬ 
plied  to  navigation  are  applicable  to  land  commerce. 
The  courts,  as  has  been  pointed  out,  already  exhibit  a 
tendency  to  adopt  this  view.  The  cases  decided  under 
the  Anti-Trust  Act 2  would  seem  to  point  in  the  same 
direction. 

Do  the  same  considerations  which  have  determined 
the  attitude  of  the  courts  concerning  navigation 

1  Winkler  v.  Philadelphia  and  Reading  Railway  Company,  4 
Pennewill  (Del.)  80. 

2  See  infra ,  pp.  79. 


UNIFORM  COMMERCIAL  REGULATION 


71 


require  a  recognition  of  similar  powers  in  Congress  to 
regulate  all  commerce  by  land,  whether  it  be  inter¬ 
state  or  foreign  on  the  one  hand,  or  intrastate  on  the 
other  ? 

At  first  blush  it  may  seem  that  the  conditions  in 
land  commerce  are  different  from  those  in  navigation. 
But  as  Justice  Brewer,  referring  to  the  suggestion 
that  there  is  a  difference  between  natural  highways, 
such  as  navigable  waters,  and  artificial  highways, 
such  as  railways,  said  in  Monongahela  Navigation 
Company  v.  United  States :  — 

“The  power  of  Congress  is  not  determined  by  the  character 
of  the  highway.  Nowhere  in  the  constitution  is  there  given 
power  in  terms  over  highways,  unless  it  be  that  clause  to  estab¬ 
lish  post  offices  and  post  roads.  The  power  which  Congress 
possesses  in  respect  to  this  taking  of  property  springs  from  the 
grant  of  power  to  regulate  commerce,  and  the  regulation  of 
commerce  implies  as  much  control  over  an  artificial  as  over  a 
natural  highway.  They  are  simply  the  means  and  instru¬ 
mentalities  of  commerce,  and  the  power  of  Congress  to  regulate 
commerce  carries  with  it  power  over  all  the  means  and  instru¬ 
mentalities  by  which  commerce  is  carried  on.  There  may  be 
differences  in  the  modes  and  manner  of  using  these  different 
highways,  but  such  differences  do  not  affect  or  limit  that  su¬ 
preme  power  of  Congress  to  regulate  commerce,  and  in  such  regu¬ 
lation  to  control  its  means  and  instrumentalities.  We  are  so 
much  accustomed  to  see  artificial  highways,  such  as  common 
roads,  turnpike  roads,  and  railroads,  constructed  under  the  au¬ 
thority  of  the  states,  and  the  improvement  of  natural  highways 
carried  on  by  the  general  government,  that  at  the  first  it  might 
seem  that  there  was  some  inherent  difference  in  the  power  of  the 
national  government  over  them.  But  the  grant  of  the  power  is 
the  same.  There  are  not  two  clauses  of  the  constitution,  each 
severally  applicable  to  a  different  kind  of  highway.  The  fee 
of  the  soil  in  neither  case  is  in  the  general  government,  but  in  the 
states  or  private  individuals.  The  differences  between  the  two 


72  SOCIAL  REFORM  AND  THE  CONSTITUTION 


are  in  their  origin — nature  provides  the  one,  man  establishes  the 
other.”  1 

In  this  case  it  was  held  that  Congress  might  in  the 
exercise  of  its  commerce  power  condemn  and  appro¬ 
priate,  with  just  compensation,  the  property,  consist¬ 
ing  of  locks  and  dams  on  navigable  waters,  of  a  cor¬ 
poration  organized  under  a  state  law  to  improve  the 
waters  of  a  river  for  purposes  of  navigation. 

If  again  it  be  said  that  land  routes  are  constructed 
either  directly  by  the  states  or  under  their  authority, 
the  answer  is  that  it  is  not  necessary  that  they  be  so 
constructed.  Congress  has  under  the  constitution 
the  power  to  construct  them  or  to  authorize  their 
construction.  Thus  in  California  v.  Pacific  Railroad 
Company,2  it  is  said :  — 

“The  power  to  construct,  or  to  authorize  individuals  or  cor¬ 
porations  to  construct,  national  highways  and  bridges  from  state 
to  state,  is  essential  to  the  complete  control  and  regulation  of 
interstate  commerce.  Without  authority  in  Congress  to  establish 
and  maintain  such  highways  and  bridges,  it  would  be  without 
authority  to  regulate  one  of  the  most  important  adjuncts  of 
commerce.  ...  Of  course  the  authority  of  Congress  over  the 
territories  of  the  United  States,  and  its  power  to  grant  franchises 
exercisable  therein,  are,  and  ever  have  been,  undoubted.  But 
the  wider  power  was  very  freely  exercised,  and  much  to  the  gen¬ 
eral  satisfaction,  in  the  creation  of  the  vast  system  of  railroads 
connecting  the  East  with  the  Pacific,  traversing  states  as  well  as 
territories,  and  employing  the  agency  of  state  as  well  as  federal 
corporations.” 3 

1 148  U.  S.  312,  342.  2 127  U.  S.  1,  39. 

3  In  quoting  this  passage  with  approval  the  Supreme  Court  said, 
in  Cherokee  Nation  v.  Southern  Kansas  Railway  Company,  135  U.  S. 
641:  “Upon  this  point  nothing  more  need  be  said.”  Cf.  also  Indiana 
v.  United  States,  148  U.  S.  148,  which  impliedly  recognizes  the  pro¬ 
priety  of  the  action  of  Congress  in  providing  for  the  construction  of 


UNIFORM  COMMERCIAL  REGULATION 


73 


Not  only  may  Congress  grant  to  state  corporations 
the  franchise  to  operate  an  interstate  railroad,1  but 
it  may  also  itself  create  corporations  in  order  more 
effectively  to  exercise  one  of  its  constitutional  powers ; 2 
and  it  may  itself  exercise  the  power  of  eminent  do¬ 
main,3  or  it  may  give  authority  to  exercise  such  a 
power  to  a  corporation,  even  if  such  corporation  is 
organized  by  a  state.4 

Up  to  the  present  time,  as  has  been  shown,  Con¬ 
gress  has  very  seldom  taken  action  with  regard  to  the 
construction  of  land  highways,  and  has  only  very 
recently,  as  in  the  Safety  Appliance  Acts  and  the 
Employers’  Liability  Acts,  attempted  any  regulation 
of  the  technical  operations  and  liabilities  of  interstate 
carriers  by  land.  But  it  would  seem,  as  in  the  case 
of  navigation,  that  its  power  of  regulation  should  be 
recognized  as  extending  to  matters  incidental  to  inter¬ 
state  commerce  by  land  whenever  their  regulation  is 
necessary  to  the  effective  regulation  of  such  commerce, 
regardless  of  the  fact  that  they  are  not,  when  con¬ 
sidered  by  themselves,  strictly  interstate  commerce. 

It  is  conceivable,  in  these  days  of  scientific  inven¬ 
tion,  that  methods  of  transportation  may  be  devised 
which  do  not  make  use,  as  do  railways,  of  specially 
constructed  highways.  Thus  it  would  not  require  an 

interstate  highways;  approved  in  Wilson  v.  Shaw,  204  U.  S.  24, 
which  goes  far  toward  holding  as  constitutional  the  action  of  Con¬ 
gress  in  constructing  the  Panama  Canal. 

1  This  was  decided  in  California  v.  Pacific  Railroad  Company,  as 
a  necessary  part  of  the  decision  that  California  could  not  tax  such  a 
franchise. 

2  McCulloch  v.  Maryland,  4  Wheaton,  316. 

3  Kohl  v.  United  States,  91  U.  S.  367. 

4  United  States  v.  Gettysburg  Electric  Railway  Company,  160 
U.  S.  668. 


74  SOCIAL  REFORM  AND  THE  CONSTITUTION 


extraordinary  development  of  motor  vehicles  using 
ordinary  highways,  or  of  the  recently  invented  air¬ 
ship,  to  provide  us  with  means  of  communication 
which  will  make  a  distinction  between  interstate  and 
intrastate  vehicles  as  difficult  and  as  inexpedient  as 
in  the  case  of  vessels  engaged  in  navigation.  In  order 
that  travel  and  transportation  may  be  safe  under 
such  conditions,  all  vehicles,  whatever  be  their  com¬ 
mercial  character,  must  observe  the  same  rules,  and 
if  a  license  be  required,  they  must  be  licensed  upon 
the  same  terms.  If  such  conditions  should  ever  arise, 
no  one  can  doubt  that  Congress,  with  the  approval  of 
the  Supreme  Court,  will  assert  its  power  to  regulate 
commerce  by  land  or  by  air  to  the  same  extent  to 
which  it  has  already  regulated  commerce  by  water. 

To  reach  these  results  the  Supreme  Court  will,  if 
necessary,  abandon  the  idea  so  recently  expressed 
that  the  power  to  regulate  navigation  is  based  on  the 
admiralty  clause,  and  will  resort  to  Chief  Justice 
Marshall’s  view  that  this  power  is  derived  from  the 
commerce  clause.  Any  attempt  to  deny  to  Congress 
the  right,  for  example,  to  insist  that  safety  appliances 
shall  be  provided  for  all  cars  which  use  a  highway 
capable  of  being  used  for  interstate  commerce,  and 
to  emphasize  the  distinction  between  an  interstate 
and  a  state  vehicle,  when  that  distinction  will  tend  to 
diminish  the  effectiveness  of  the  power  of  Congress  to 
regulate  interstate  commerce,  indicates  an  inability 
to  see  the  fundamental  principle  which  the  Supreme 
Court  has  steadily  endeavored  to  apply  in  the  long 
course  of  its  history,  viz.  uniform  regulation  of  all 
commerce,  whether  by  water  or  by  land.  When  the 
commerce  clause  was  believed  to  be  broader  than 


UNIFORM  COMMERCIAL  REGULATION 


75 


the  admiralty  clause,  the  court  referred  the  power  of 
Congress  to  regulate  navigation  to  that  clause.  When 
by  reason  of  the  wider  conception  of  navigable  waters, 
which  was  developed  through  the  exercise  of  the  ad¬ 
miralty  jurisdiction,  the  admiralty  clause  was  regarded 
as  vesting  wider  powers  of  regulation  in  Congress, 
resort  was  had  by  the  court  to  that  clause  of  the 
constitution.  Such,  at  any  rate,  are  the  conclusions 
which  we  must  draw  from  a  study  of  the  most  recent 
cases  determining  the  effect  of  the  Anti-Trust  Act  of 
1890. 

III.  The  Power  of  Congress  to  regulate  Com¬ 
merce  OTHER  THAN  TRANSPORTATION 

Until  the  latter  part  of  the  nineteenth  century  the 
regulation  by  Congress  of  navigation  was  not  extended, 
Axcept  in  a  few  cases,  to  anything  but  the  means  and 
instrumentalities  of  transportation.  Indeed,  the  only 
laws  passed  by  Congress  that  went  beyond  such 
limits  were  those  which  fixed  the  liability  to  shippers 
of  carriers  by  water  and  the  legal  relations  of  seamen. 
In  the  case  of  commerce  by  land,  however,  Congress 
has  extended  its  regulation  not  only  to  carriers  and 
shippers,  but  also  to  other  persons  who  are  engaged 
in  foreign  and  interstate  commerce.  For  while  the 
decision  that  commerce  included  navigation,  with  all 
the  implications  which  have  been  noted,  laid  the  basis 
for  the  comprehensive  powers  of  Congress  to  regu¬ 
late  transportation  both  by  water  and  by  land,  a 
series  of  decisions  limiting  the  powers  of  the  states 
over  commerce  announced  the  principle  that  com¬ 
merce  was  something  more  than  mere  transportation 


76  SOCIAL  REFORM  AND  THE  CONSTITUTION 


and  communication,  and  embraced,  for  example,  sales 
and  agreements  with  regard  to  sales.  Thus  the 
states  were  forbidden  to  tax  salesmen  of  business 
houses  in  other  states  for  the  privilege  of  taking 
orders  within  their  limits  for  goods.1  Thus  again  the 
states  were  forbidden  to  prohibit  the  sale  within  their 
limits  of  what  the  Supreme  Court  recognized  to  be  a 
legitimate  article  of  commerce.2  In  this  way  it  was 
recognized  that  commerce  was  something  more  than 
transportation,  and  in  this  way,  naturally,  the  powers 
of  Congress  were  really  increased  beyond  the  extent 
to  which  they  had  originally  been  exercised  with  regard 
to  navigation. 

When  there  sprang  up  throughout  this  country,  as 
a  result  of  the  very  general  concentration  of  industry, 
great  corporations  and  groups  of  corporations  acting 
in  harmony  with  each  other,  each  great  corporation 
or  group  of  corporations  apparently  striving  for  a 
monopoly  of  the  particular  branch  of  industry  to 
which  its  attention  was  devoted,  the  way  was  clear 
for  Congress  to  extend,  if  it  saw  fit,  its  power  of 
regulation  to  that  part  of  foreign  and  interstate  com¬ 
merce  not  embraced  within  transportation.  This 
field  it  attempted  to  enter  by  the  Anti-Trust  Act, 
passed  in  the  latter  part  of  the  nineteenth  century. 
This  act  made  illegal  any  contract,  combination,  or 
conspiracy  in  restraint  of  trade  or  commerce  with 
foreign  nations  or  among  the  several  states,  thus  lay¬ 
ing  down  the  rule  that  there  should  be  freedom  of 
competition  in  foreign  and  interstate  commerce. 

1  Robbins  v.  Shelby  County  Taxing  District,  120  U.  S.  489. 

2  Leisy  v.  Hardin,  135  U.  S.  100;  Schollenberger  v.  Pennsylvania, 
171  U.  S.  1. 


UNIFORM  COMMERCIAL  REGULATION 


77 


One  of  the  first,  if  not  the  first,  of  the  cases  arising 
under  this  act  was  United  States  v.  E.  C.  Knight 
Company,1  in  which  it  was  held  that  the  mere  pur¬ 
chase  by  one  manufacturing  corporation  of  the  plant 
of  a  competitor  was  not,  and  could  not  be,  prohibited 
by  the  act  of  Congress,  because  manufacturing  was 
not  commerce,  even  if  the  articles  manufactured  were 
intended  to  be  sent  out  of  the  state. 

Since  the  decision  of  this  case,  a  number  of  other 
cases  have  come  before  the  court.  Some  of  these  have 
involved  the  legality  of  agreements  of  transportation 
companies,  and  are  of  interest  not  because  they  have 
in  any  way  explained  the  meaning  of  commerce,  —  for 
the  companies  concerned  were  admittedly  engaged  in 
commerce,  —  but  because  they  indicated  an  intention 
upon  the  part  of  the  court  to  apply  the  act  strictly, 
without  considering  whether  the  effect  of  the  contract 
in  question  was  or  was  not  an  unreasonable  restraint 
of  commerce.2  Other  cases,  however,  have  attempted 
to  define,  or  at  any  rate  to  describe,  commerce,  and 
have  held  that  interstate  commerce  comprehends  in¬ 
tercourse  for  all  the  purposes  of  trade  in  any  and  all 
its  forms,  including  the  transportation,  purchase,  sale, 
and  exchange  of  commodities  between  citizens  of 
different  states,  and  that  the  power  to  regulate  it 
embraces  all  the  instrumentalities  by  which  such 
commerce  is  conducted.  Accordingly,  agreements 
between  corporations  engaged  in  the  manufacture, 
sale,  and  transportation  of  commodities,  whereby 

1 156  u.  S.  1. 

2  Such  cases  were  United  States  v.  Trans-Missouri  Freight  Associa¬ 
tion,  166  U.  S.  290;  and  United  States  v.  Joint  Traffic  Association, 
171  U.  S.  505. 


78  SOCIAL  REFORM  AND  THE  CONSTITUTION 


competition  among  them  as  to  interstate  commerce 
was  avoided,  have  been  held  to  be  illegal  under  the 
Anti-Trust  Act.1  In  the  Northern  Securities  case 2 
the  formation  of  a  holding  company,  which  actually 
controlled  through  ownership  of  stock  the  operations 
of  competing  transportation  companies,  was  held  to 
be  illegal;  and  in  Continental  Wall  Paper  Company 
v.  Voight  it  was  held  that,  if  articles  were  sold  in  accord¬ 
ance  with  a  contract  made  in  restraint  of  commerce 
among  the  several  states,  the  seller  could  not  recover 
the  purchase  price.3 

Some  of  the  later  cases  decided  in  applying  the 
Anti-Trust  Act  have  also  gone  far  in  limiting  the 
effect  of  the  decision  in  the  Knight  case.  Thus  in 
Swift  and  Company  v.  United  States,4  the  bill  of  in¬ 
junction  granted  in  the  circuit  court  charged  — 

“a  combination  of  a  dominant  proportion  of  the  dealers  in 
fresh  meat  throughout  the  United  States  not  to  bid  against  each 
other  in  the  live-stock  markets  of  the  different  states,  to  bid 
up  prices  for  a  few  days  in  order  to  induce  cattlemen  to  send 
their  stock  to  the  stockyards,  to  fix  prices  at  which  they  will 
sell,  and  to  that  end  to  restrict  shipments  of  meat  when  necessary, 
to  establish  a  uniform  rule  of  credit  to  dealers,  and  to  keep  a 
black  list,  to  make  uniform  and  improper  charges  for  cartage, 
and  finally  to  get  less  than  lawful  rates  from  the  railroads  to  the 
exclusion  of  competitors.  It  is  true  that  the  last  charge  is  not 
clearly  stated  to  be  a  part  of  the  combination.” 

1  Addyston  Pipe  and  Steel  Company  v.  United  States,  175  U.  S. 
21 1 ;  Montague  v.  Lowry,  193  U.  S.  38;  Continental  Wall  Paper 
Company  v.  Voight,  etc.,  212  U.  S.  227. 

2  Northern  Securities  Company  v.  United  States,  193  U.  S.  197. 

3  This  case  was  distinguished  from  Connolly  v.  Union  Sewer  Pipe 
Co.,  184  U.  S.  540,  where  recovery  was  permitted  on  a  contract  of 
sale,  not  a  part  of  the  illegal  combination  into  which  the  seller  was 
admitted  to  have  entered. 

4  196  U.  S.  375. 


UNIFORM  COMMERCIAL  REGULATION 


79 


This  bill  was  demurred  to,  and  the  case  came  before 
the  Supreme  Court  on  the  demurrer,  so  that  there 
was  no  question  as  to  the  facts.  The  Supreme  Court 
modified  slightly,  but  otherwise  affirmed  the  decree  of 
the  lower  court  issuing  the  injunction.  In  the  course 
of  the  opinion  delivered  by  Justice  Holmes,  it  was 
said,  in  answer  to  the  objection  that  the  bill  did  not 
set  forth  sufficient  definite  or  specific  facts :  — 

“The  scheme  as  a  whole  seems  to  be  within  reach  of  the  law. 
The  constituent  elements,  as  we  have  stated  them,  are  enough 
to  give  to  the  scheme  a  body  and,  for  all  that  we  can  say,  to  ac¬ 
complish  it.  .  .  .  Although  the  combination  alleged  embraces 
restraint  and  monopoly  of  trade  within  a  single  state,  its  effect 
upon  commerce  among  the  states  is  not  accidental,  secondary, 
remote,  or  merely  probable.  On  the  allegations  of  the  bill  the 
latter  commerce  no  less,  perhaps  even  more,  than  commerce 
within  a  single  state  is  an  object  of  attack.” 

Somewhat  the  same  view  was  taken  by  the  Su¬ 
preme  Court  in  the  later  case  of  Loewe  v.  Lawlor.1 
This  case  also  came  up  on  demurrer  and  involved 
the  legality  under  the  Anti-Trust  Act  of  an  alleged 
combination  among  workmen  in  the  nature  of  a  boycott 
following  a  strike.  The  averments  of  the  complaint, 
as  summarized  by  the  court,  were  — 

“that  there  was  an  existing  interstate  traffic  between  plain¬ 
tiffs  and  citizens  of  other  states,  and  that  for  the  direct  pur¬ 
pose  of  destroying  such  interstate  traffic  defendants  combined, 
not  merely  to  prevent  plaintiffs  from  manufacturing  articles 
then  and  there  intended  for  transportation  beyond  the  state 
but  also  to  prevent  the  vendees  from  reselling  the  hats  which 
they  had  imported  from  Connecticut,  or  from  further  negotiating 
with  plaintiffs  for  the  purchase  and  interstate  transportation 
of  such  hats  from  Connecticut  to  the  various  places  of  destina- 

1  208  U.  S.  274, 


8o  SOCIAL  REFORM  AND  THE  CONSTITUTION 


tion.  So  that,  although  some  of  the  means  whereby  the  inter¬ 
state  traffic  was  to  be  destroyed  were  acts  within  a  state,  and 
some  of  them  were  in  themselves  as  a  part  of  their  obvious  pur¬ 
pose  and  effect  beyond  the  scope  of  federal  authority,  still, 
as  we  have  seen,  the  acts  must  be  considered  as  a  whole,  and  the 
plan  is  open  to  condemnation,  notwithstanding  a  negligible 
amount  of  intrastate  business  might  be  affected  in  carrying  it 
out.  If  the  purposes  of  the  combination  were,  as  alleged,  to  pre¬ 
vent  any  interstate  transportation  at  all,  the  fact  that  the  means 
operated  at  one  end  before  physical  transportation  commenced, 
and  at  the  other  end  after  physical  transportation  ended,  was 
immaterial.” 

The  court  decided  that  “a  case  within  the  statute 
was  set  up  and  that  the  demurrer  should  have  been 
overruled. ”  It  may  therefore  be  said  that  in  the  case 
of  commerce  by  land,  whether  transportation  or  not, 
as  well  as  in  the  case  of  navigation,  Congress  has  the 
right  incidentally  to  regulate  intrastate  commerce 
where  such  regulation  is  necessary  to  the  effective 
regulation  of  interstate  commerce. 

IV.  The  Power  of  Congress  to  prohibit 

Commerce 

The  rule  which  had  been  applied  to  navigation, 
viz.  that  Congress,  in  the  exercise  of  its  power  to 
regulate,  has  the  right  to  prohibit  commerce,  has  been 
applied  to  both  foreign  commerce,  not  navigation,1 
and  to  interstate  commerce  by  land.2  In  United 
States  v.  Delaware  and  Hudson  Company,  Justice 
White,  in  delivering  the  opinion  of  the  court,  said : 
“We  then  construe  the  statute  as  prohibiting  a  rail- 

1  Buttfield  v.  Stranahan,  192  U.  S.  470. 

2  Champion  v.  Ames,  188  U.  S.  321;  United  States  v.  Delaware 
and  Hudson  Company,  213  U.  S.  366. 


UNIFORM  COMMERCIAL  REGULATION 


8l 


road  company  engaged  in  interstate  commerce  from 
transporting  in  such  commerce  articles  or  commodi¬ 
ties”  under  conditions  which  are  specified.  “The 
question  then  arises  whether,  as  thus  construed,  the 
statute  was  inherently  within  the  power  of  Congress 
to  enact  as  a  regulation  of  commerce.  That  it  was, 
we  think,  is  apparent.”  He  added  that,  if  reference 
to  authority  were  necessary,  it  was  “afforded  by  a 
consideration  of  the  ruling  in  the  New  Haven  case  to 
which  we  have  previously  referred.”  This  was  the 
case  of  the  New  Haven  Railroad  v.  Interstate  Com¬ 
merce  Commission,1  in  which  it  was  held  that  the 
Interstate  Commerce  Act  prevented  “  a  carrier  engaged 
in  interstate  commerce  from  buying  and  selling  a 
commodity  which  it  carried,  in  such  a  way  as  to  frus¬ 
trate  the  provisions  of  the  act,  even  if  the  effect  of 
applying  the  act  would  be  substantially  to  render 
buying  and  selling  by  an  interstate  carrier  of  a  com¬ 
modity  which  it  transported  practically  impossible.” 

“We  do  not  say  this,”  Justice  White  continued,  “upon  the 
assumption  that  by  the  grant  of  power  to  regulate  commerce  the 
authority  of  the  government  of  the  United  States  has  been  un¬ 
duly  limited  on  the  one  hand  and  inordinately  extended  on  the 
other,  nor  do  we  rest  it  upon  the  hypothesis  that  the  power  con¬ 
ferred  embraces  the  right  absolutely  to  prohibit  the  movement 
between  the  states  of  lawful  commodities  or  to  destroy  the  gov¬ 
ernmental  power  of  the  states  as  to  subjects  within  their  jurisdic¬ 
tion,  however  remotely  and  indirectly  the  exercise  of  such 
powers  may  touch  interstate  commerce.  On  the  contrary, 
putting  these  considerations  entirely  out  of  mind,  the  conclusion 
just  previously  stated  rests  upon  what  we  deem  to  be  the  obvious 
result  of  the  statute  as  we  have  interpreted  it:  that  it  merely 
and  unequivocally  is  confined  to  a  regulation  which  Congress 

1  200  U.  S.  361. 

G 


8  2  SOCIAL  REFORM  AND  THE  CONSTITUTION 

has  the  power  to  adopt  and  to  which  all  preexisting  rights  of  the 
railroad  companies  were  subordinated.” 1 

The  foregoing  examination  of  the  decisions  upon 
the  recent  legislation  of  Congress  regulating  commerce 
would  appear  to  yield  the  following  results.  In  the 
first  place,  there  has  been  an  extension  of  the  matter 
subject  to  Congressional  regulation.  Not  merely 
transportation  and  its  incidents,  but  also  the  sale  and 
exchange  of  commodities,  are  commerce,  while  it  would 
appear  to  be  recognized  that  Congress  may  regulate 
purely  intrastate  commerce  where  its  regulation  is 
necessary  to  the  effective  regulation  of  interstate 
commerce.  In  the  second  place,  the  fact  that  the 
power  to  regulate  implies  the  power,  subject  to  other 
constitutional  limitations,  to  prohibit,  is  given  an 
emphasis  which  it  had  never  before  received  apart 
from  the  regulation  of  navigation. 

The  emphasis  which  has  been  given  by  these  recent 
decisions  to  the  power  to  prohibit,  included  within  the 
power  to  regulate,  makes  profitable  the  consideration 
of  the  question,  whether  that  power  may  be  used  in 
such  a  way  as  to  encourage  if  not  to  force  upon  the 
part  of  those  desiring  to  engage  in  foreign  or  inter¬ 
state  commerce,  conduct  which  Congress  has  not 
under  the  other  provisions  of  the  constitution  the 

1The  hint  given  in  this  opinion,  that  the  power  of  Congress  to  reg¬ 
ulate  commerce  is  subject  to  the  ordinary  constitutional  limitations  on 
the  powers  of  the  United  States  government,  is  made  in  a  more  for¬ 
cible  manner  in  Champion  v.  Ames,  where  it  is  distinctly  stated 
that  the  commerce  power  of  Congress  “  although  plenary  cannot  be 
deemed  arbitrary,  since  it  is  subject  to  such  limitations  or  restric¬ 
tions  as  are  prescribed  by  the  constitution  ” ;  and  in  Monongahela 
Navigation  Company  v.  United  States  (148  U.  S.  312)  and  Adair 
v.  United  States  (208  U.  S.  161)  it  is  held  that  the  commerce 
power  is  subject  to  the  limitations  of  the  fifth  amendment. 


UNIFORM  COMMERCIAL  REGULATION  83 


right  to  regulate.  Congress  would  appear  to  have 
taken  such  a  view  of  its  powers  in  the  case  of  a  num¬ 
ber  of  statutes  which  it  has  recently  passed.  Thus, 
as  we  have  just  seen,  Congress,  although  it  has  no 
positive  power  to  prohibit  lotteries  in  the  states,  has 
both  prohibited  the  use  of  the  post  office  for  the  pur¬ 
poses  of  lottery  business,  and  punished  criminally  the 
transportation  in  interstate  or  foreign  commerce  of 
lottery  tickets,  and  its  action  has  in  both  instances 
been  upheld  by  the  Supreme  Court.1  Congress  has 
also  provided  in  its  pure  food  legislation  that  food 
products  not  complying  with  the  provisions  of  the 
pur  food  law  shall  not  be  transported  in  foreign  or 
interstate  commerce.  Its  action  has  just  been  ap¬ 
proved  by  the  Supreme  Court.2 

In  all  these  cases,  however,  as  has  been  pointed  out 
by  Professor  Willoughby,3  both  the  purpose  and  the 
effect  of  the  action  of  Congress  has  been  the  protec¬ 
tion  of  the  people  who  are  engaging  in  commerce,  i.e. 
the  consumers  of  the  articles  of  foreign  and  inter¬ 
state  commerce.  The  decisions  of  the  Supreme 
Court,  therefore,  are  not  in  his  opinion  authority  for 
the  proposition  that  Congress  may  use  its  power  to 
regulate  commerce  for  the  protection  of  the  producer 
of  the  articles  by  prohibiting  their  transportation  in 
interstate  or  foreign  commerce.  For  by  so  doing  it  is 
entering  into  a  field  of  regulation  not  assigned  to  it 
by  the  constitution,  but  recognized  as  belonging  to  the 

1  In  re  Rapier,  143  U.  S.  no;  Champion  v.  Ames,  188  U.  S.  321. 

2  Hipolite  Egg  Company  v.  United  States  October  Term,  1910. 

3  “  The  Constitutional  Law  of  the  United  States,”  p.  738.  It 
would  seem  that  the  dictum  from  Ex  parte  Jackson,  96  U.  S.  727, 
quoted  in  this  passage,  has  been  repudiated  in  the  Lottery  cases. 


84  SOCIAL  REFORM  AND  THE  CONSTITUTION 

states.  For  this  reason  Professor  Willoughby  regards 
as  improper  from  a  constitutional  point  of  view  the 
bill  recently  introduced  into  the  Congress  of  the 
United  States  forbidding  the  transportation  in  foreign 
and  interstate  commerce  of  articles  made  by  child 
labor. 

Is  now  this  distinction  a  valid  one,  i.e.  is  it  justified 
by  our  legislative  and  judicial  history  and  precedents  ? 
Is  Congress,  in  other  words,  limited  in  the  exercise 
of  its  power  to  prohibit  commerce  to  the  protection 
of  the  consumer?  In  the  first  place,  is  such  a  rule 
the  effect  of  the  decisions  with  regard  to  the  power 
to  prohibit?  It  may  be,  of  course,  that  the  court 
had  this  idea  in  mind  when  it  decided  the  Lottery 
and  the  Tea  cases,  but  it  certainly  did  not  give  expres¬ 
sion  to  it.  These  cases,  while  only  authority  for  the 
proposition  that  the  power  to  regulate  commerce  may 
be  exercised  in  the  interest  of  the  consumer,  are  in  no 
way  authority  for  the  proposition  that  the  power  is 
thus  limited.  Furthermore,  in  one  of  the  latest  cases 
decided  by  the  court  upon  this  subject,  viz.  United 
States  v.  Delaware  &  Hudson  Co.,1  and  which  upheld 
the  propriety  of  the  exercise  of  the  power  to  pro¬ 
hibit,  the  power  was,  as  a  matter  of  fact,  exercised 
to  protect  the  independent  mine  owner  as  well  as 
the  consuming  public.  Finally,  in  the  Beef  Trust 
case  one  of  the  important  facts  going  to  make  up  the 
conspiracy  held  to  be  prohibited  by  the  act  of  Con¬ 
gress  was  the  combination  among  the  parties  to  the 
conspiracy  not  to  bid  against  each  other  in  the  live¬ 
stock  markets  of  the  different  states  “  except  per¬ 
functorily  and  without  good  faith”  and  by  this  means 

1 213  U.  S.  366. 


UNIFORM  COMMERCIAL  REGULATION  85 


“  compelling  the  owners  of  such  stock  to  sell  at  less 
prices  than  they  would  receive  if  the  bidding  was 
really  competitive.”  The  injunction  made  perpetual 
by  the  circuit  court  and  as  modified  by  the  Supreme 
Court  restrained  the  defendants  from  giving  directions 
or  from  making  agreements  not  to  compete  in  the 
purchase  of  live  stock.1 

If,  in  the  second  place,  we  study  our  legislative 
history,  and  particularly  the  history  of  the  adoption 
of  the  commerce  clause,  we  can  hardly  fail  to  reach 
the  conclusion  that  one  of  the  most  important  pur¬ 
poses  of  those  who  framed  the  constitution  was,  by 
means  of  the  commerce  clause,  and  those  clauses 
defining  the  taxing  power  of  the  federal  government, 
particularly  those  with  regard  to  the  power  to  levy 
customs  duties,  to  arrange  the  powers  of  government 
in  such  a  way  that  a  uniform,  harmonious  policy 
might  be  adopted  which  would,  through  the  imposi¬ 
tion  of  protective  duties,  encourage  American  manu¬ 
factures.2  Indeed,  the  first  tariff  act  enacted  by  the 
Congress  provided  by  the  constitution  contained  in 
its  preamble  a  statement  of  the  necessity  of  impos¬ 
ing  duties  for  “the  encouragement  and  protection  of 
manufactures.”  The  protection  of  American  manu¬ 
facturers  was  therefore  always  regarded  as  constitu¬ 
tionally  within  the  power  of  Congress,  although 
manufactures  are  not  of  themselves  a  part  of  com¬ 
merce.  If  the  protection  of  the  employer  engaged  in 
manufacturing  is  constitutional,  it  is  difficult  to  see 
why  similar  protection  may  not  be  extended  to  the 

1  See  Swift  &  Co.  v.  U.  S.,  196  U.  S.  375,  400. 

2  See  Brown,  “The  Commercial  Power  of  Congress,”  pp.  16,  154, 
160. 


86  SOCIAL  REFORM  AND  THE  CONSTITUTION 


employed  through  the  exercise  of  some  general  power 
admittedly  granted  to  the  federal  government.  In¬ 
deed,  one  of  the  arguments  most  commonly  advanced 
in  favor  of  the  protective  tariff  is  that  it  betters  the 
condition  of  the  laboring  classes. 

This  being  the  case,  the  validity  of  the  distinction 
between  the  consumer  and  the  producer  would  seem 
to  be  more  than  doubtful  as  a  criterion  in  determining 
the  constitutionality  of  an  attempted  regulation  of 
commerce  by  Congress.  Of  course,  it  is  true  that 
when  a  protective  tariff  is  established,  it  is  the  power 
of  taxation  rather  than  the  commercial  power  which 
is  exercised,  and  that  this  power  may  be  used  to 
provide  for  “the  general  welfare  of  the  United  States.”1 
But  after  all  it  is  in  both  cases  a  power  of  the  federal 
government  which  is  exercised  in  the  interest  of  the 
producing  rather  than  the  consuming  classes;  and  if 
the  purpose  is  proper  in  one  case,  it  is  difficult  to  see 
its  impropriety  in  the  other,  unless  such  a  purpose  is 
expressly  or  impliedly  forbidden.  Furthermore,  if  it 
be  said  that  the  courts  are  not  at  liberty  to  inquire 
into  the  motives  of  the  legislature  in  its  exercise  of 
the  taxing  power,  it  may  be  answered  that  the  field 
of  judicial  inquiry  is  no  wider  in  the  case  of  the  com¬ 
merce  power,  since  no  limitation  has  been  imposed 
upon  the  purposes  for  which  that  power  may  be 
exercised.  In  either  case,  it  is  a  question  of  consti¬ 
tutional  power  rather  than  of  legislative  motive.  In 
In  re  Rapier2  the  Supreme  Court  said:  “It  is  not 
necessary  that  Congress  should  have  the  power  to 
deal  with  crime  and  immorality  within  the  states,  in 
order  to  maintain  that  it  possesses  the  power  to  for- 
1  Const.  Art.  I,  Sec.  8.  2  143  U.  S.  no. 


UNIFORM  COMMERCIAL  REGULATION  87 


bid  the  use  of  the  mails  in  aid  of  the  perpetration  of 
crime  or  immorality.”  Finally,  attention  may  be 
called  to  the  prohibition  of  the  importation  of  con¬ 
vict-made  goods,  first  made  by  Congress  in  the 
Tariff  Act  of  1890.  This  prohibition  made  as  a  result 
of  the  exercise  of  the  commerce  power  has  been  un¬ 
questioned  for  twenty  years  and  is  evidently  intended 
to  protect  the  American  producer  rather  than  con¬ 
sumer. 

It  may  perhaps  be  said  that  the  recently  decided 
case  of  Adair  v.  United  States  1  is  opposed  to  this 
view.  In  this  case  an  act  of  Congress  was  declared 
to  be  unconstitutional  which  attempted  to  forbid 
certain  corporations  engaged  in  interstate  commerce 
and  their  agents  to  discriminate  against  trade  unions 
in  the  employment  or  discharge  of  men.  Mr.  Justice 
Harlan  wrote  the  majority  opinion,  Mr.  Justice 
McKenna  and  Mr.  Justice  Holmes  dissenting.  His 
argument  was  that  the  act  violated  the  fifth  amend¬ 
ment  in  depriving  without  due  process  of  law  the 
corporations  concerned  and  their  agents  of  their 
liberty  to  make  contracts,  and  that  it  was  therefore 
void  unless  it  could  be  justified  as  a  regulation  of 
commerce.  Mr.  Justice  Harlan  then  examined  the 
question  whether  the  act  was  a  regulation  of  com¬ 
merce,  decided  that  the  regulation  in  this  manner  of 
the  contract  of  employment  of  one  engaged  in  inter¬ 
state  commerce  was  not  a  regulation  of  commerce, 
and  therefore  held  that  the  act  was  unconstitutional. 
The  decision  would  thus  appear  to  be  an  authority 
for  the  proposition  that  the  conditions  of  employment 
of  even  those  persons  who  are  engaged  in  interstate 

1 208  U.  S.  161, 


88  SOCIAL  REFORM  AND  THE  CONSTITUTION 

or  foreign  commerce  are  not  commerce,  and  therefore 
not  subject  to  the  regulation  of  commerce.  1 

It  is  submitted  that  the  statement  in  the  opinion 
that  these  conditions  of  employment  are  not  com¬ 
merce  is  not  in  harmony  with  other  holdings  of  the 
court,1  and  was  not  necessary  to  the  decision  that  the 
act  of  Congress  under  consideration  was  unconstitu¬ 
tional.  This  decision,  if  it  may  be  called  one,  was 
made  on  the  assumption  that  a  regulation  of  Con¬ 
gress  in  conflict  with  the  provisions  of  the  fifth  amend¬ 
ment  is  constitutional  if  it  is  a  regulation  of  com¬ 
merce.  This  is  not  the  law.  Regulations  of  Congress, 
which  were  admittedly  regulations  of  commerce, 
have  been  either  held  or  said  to  be  unconstitutional 
because  they  deprived  persons  of  their  property  with¬ 
out  compensation  or  without  due  process  of  law.2 
The  act  of  Congress  under  consideration  in  Adair  v. 
United  States  was,  therefore,  even  if  considered  to  be 
a  regulation  of  commerce,  unconstitutional,  because 
violative  of  the  fifth  amendment,  and  the  statement 
in  the  opinion  that  the  conditions  of  employment  of 
one  engaged  in  transportation  are  not  included  within 
the  content  of  the  commerce  subject  to  the  regula¬ 
tion  of  Congress  is  simply  obiter  dictum. 

But  even  if  Adair  v.  United  States  be  considered 
decisive  of  the  proposition  that  the  conditions  of  em¬ 
ployment  are  not  commerce,  the  case  is  not  an  au¬ 
thority  as  to  the  power  of  Congress  to  prohibit  the 
transportation  in  foreign  or  interstate  commerce  of 
specific  articles.  For  the  act  of  Congress  under  con- 

1  Supra ,  p.  6i. 

2  Monongahela  Navigation  Co.  v.  United  States,  148  U.  S.  312; 
cf.  Champion  v.  Ames,  188  U.  S.  321. 


UNIFORM  COMMERCIAL  REGULATION  89 

sideration  in  Adair  v.  United  States  did  not  purport 
to  be  an  exercise  of  the  prohibitory  power  of  Con¬ 
gress,  but  was,  on  the  contrary,  an  attempt  positively 
and  directly  to  regulate  a  particular  subject  with  the 
necessarily  resultant  effect  of  subjecting  certain  acts 
in  all  cases  to  criminal  punishment.  Such,  however, 
is  not  the  effect  of  the  exercise  of  the  power  to  pro¬ 
hibit.  An  act  of  Congress,  e.g .,  which  prohibits  the 
interstate  transportation  of  articles  made  by  child 
labor  or  under  any  conditions  prohibited  by  Congress 
does  not  attempt  to  punish  criminally  or  otherwise 
make  illegal  the  employment  of  children  or  the  viola¬ 
tion  of  such  conditions.  It  merely  denies  to  articles 
made  under  the  prohibited  conditions  the  right  or 
privilege  of  being  an  article  of  interstate  commerce. 
The  attempt  on  the  part  of  Congress  to  regulate 
positively  conditions  of  manufacture  would  probably 
in  all  cases  be  regarded  as  an  excess  of  power  because 
making  illegal  certain  acts  not  subject  to  Congres¬ 
sional  regulation.  The  prohibition  to  enter  interstate 
commerce  is,  however,  the  exercise  of  a  power  ad¬ 
mittedly  within  the  jurisdiction  of  Congress,  and  the 
only  objection  to  its  use  in  the  particular  case  is  the 
motive  by  which  Congress  has  been  actuated. 

While  it  must  be  admitted  that  the  motives  of 
legislatures  are  not  entirely  outside  of  judicial  cog¬ 
nizance,  at  the  same  time  it  is  to  be  remembered  both 
that  the  courts  enter  upon  their  consideration  with 
extreme  reluctance  and  that  the  desire  to  encourage 
American  manufactures  and  protect  American  laborers 
has  been  regarded  as  a  justifiable  motive  for  the  exer¬ 
cise  by  Congress  of  its  power  to  regulate  foreign 
commerce  as  well  as  to  impose  taxes,  although  the 


go  SOCIAL  REFORM  AND  THE  CONSTITUTION 


general  subject  of  the  regulation  of  manufacturing  is 
not  within  the  jurisdiction  of  the  federal  government. 

Finally,  it  is  to  be  remembered  that  the  power  of 
regulation  may,  like  the  power  of  taxation,  properly 
be  used  either  to  destroy  or  to  encourage.  This  is 
the  reason  why  neither  the  states  nor  the  general  gov¬ 
ernment  may  in  our  federal  political  system  impose 
taxes  upon  the  agencies  of  each  other.  This  is  again 
the  reason  why  the  police  power  of  the  states,  which 
is  in  essence  a  power  similar  to  the  commerce  power 
of  Congress,  though  of  wider  content,  has  been  recog¬ 
nized  as  properly  used  to  destroy  certain  occupations, 
which  prior  to  its  exercise  had  been  perfectly  legiti¬ 
mate,  but  which  in  the  opinion  of  the  legislature  had 
become  dangerous  to  the  morals  and  welfare  of  the 
people.1 

We  may  say,  then,  that  Congress  has  the  power  to 
prohibit  the  transportation  in  interstate  and  foreign 
commerce  of  any  article  made  contrary  to  its  injunc¬ 
tion,  provided  its  regulations  do  not  offend  against 
some  other  provision  of  the  constitution.  This  con¬ 
ception  of  the  power  to  prohibit  as  a  part  of  the 
power  of  Congress  to  regulate  commerce,  is,  it  must 
be  admitted,  opposed  to  the  ideas  which  have  been 
developed  within  the  last  fifty  or  seventy-five  years 
as  to  the  content  and  legal  position  of  that  intra¬ 
state  commerce  which  the  judicial  decisions  rendered 
during  that  time  have  distinguished.  Such  commerce 
has  been  considered  as  outside  of  the  jurisdiction  of 
Congress  and  as  necessarily  remaining  subject  only  to 
state  regulation.  Such  a  distribution  of  powers  has 
been  regarded  as  constitutionally  necessary,  even 
1  Cf.  Mugler  v.  Kansas,  123  U.  S.  623. 


UNIFORM  COMMERCIAL  REGULATION 


91 


though  its  inevitable  result  in  the  competition  now 
existing  between  the  different  industrial  states  is 
that  any  uniform  regulation  of  industrial  conditions 
will  be  forever  impossible,  no  matter  how  urgent  such 
uniform  regulation  may  be. 

It  is  quite  significant  of  the  extent  to  which  con¬ 
ceptions  of  state  powers  have  in  the  last  half  century 
been  pushed  that  Congress  is  denied  the  right  to 
exercise  its  power  to  prohibit  as  a  part  of  its  com¬ 
mercial  power,  because  its  exercise  of  the  power  will 
interfere  with  the  power  of  the  states  to  regulate 
manufacturing,  and  that  in  order  to  justify  the  denial 
of  this  power  the  courts  are  called  upon  to  inquire 
not  so  much  into  the  extent  of  a  constitutional  power 
as  into  the  motives  which  have  brought  about  its 
exercise.  These  conceptions  are  regarded  as  proper, 
although  the  constitution  declares  that  the  laws  of 
Congress  made  in  pursuance  of  the  constitution  shall 
be  the  supreme  law  of  the  land.  Men’s  minds  are 
peculiarly  twisted  when  they  argue,  under  a  consti¬ 
tution  containing  such  a  provision,  that  a  regulation 
purporting  to  be  a  regulation  of  interstate  commerce 
is  not  such  because  it  will  necessarily  have  the  inci¬ 
dental  effect  of  regulating  conditions  of  manufacture. 
The  only  reason  why  it  will  have  this  incidental  effect 
is  because  in  the  economic  conditions  of  the  present 
day  manufacturing  has  ceased  to  be  a  state,  and  has 
become  an  interstate,  matter.  A  state  with  no  factory 
legislation  can,  in  the  present  conditions  of  interstate 
transportation,  underbid  a  state  which  seriously 
attempts  to  improve  the  conditions  of  manufacturing. 
The  denial  by  the  federal  government  of  the  right  of 
the  states  to  protect  their  laboring  population  against 


92  SOCIAL  REFORM  AND  THE  CONSTITUTION 


competition  based  on  cheaper  and  lower  conditions  of 
labor,  really  makes  it  incumbent  on  the  federal  govern¬ 
ment  to  exercise  its  constitutional  powers  to  the 
fullest  extent  in  the  interest  of  the  laboring  classes 
which  the  states  no  longer  can  protect. 

The  close  connection  existing  thus  at  the  present 
time  between  interstate  commerce  and  intrastate 
manufacturing  is  not  therefore  an  argument  that  a 
regulation  of  Congress  is  not  a  regulation  of  the 
commerce  subject  to  its  jurisdiction  because  such  a 
regulation  has  the  incidental  effect  of  fixing  the  con¬ 
ditions  of  manufacturing.  It  is  rather  an  argument 
in  favor  of  the  direct  and  positive  regulation  by 
Congress  of  intrastate  manufacturing  on  the  theory 
adopted  by  the  Supreme  Court  in  its  determination  of 
the  extent  of  the  powers  of  Congress  relative  to  navi¬ 
gation,  and  now  being  cautiously  extended  to  other 
parts  of  commerce,  viz.  that  Congress  may  regulate 
anything  whose  regulation  is  necessary  to  the  effective 
regulation  of  foreign  or  interstate  commerce. 

If  this  is  a  correct  view  of  the  matter,  Congress 
may,  through  the  exercise  of  its  power  to  prohibit  the 
interstate  or  foreign  transportation  of  articles  made 
contrary  to  the  provisions  of  its  legislation,  exercise 
an  enormous  influence  in  securing  uniform  regulation 
of  all  the  conditions  of  manufacturing  in  this  country. 
It  may  not  perhaps  positively  regulate  under  criminal 
penalties  these  conditions,  but  by  the  passage  of  a 
factory  or  labor  code  whose  observance  would  be 
necessary  by  any  manufacturer  desirous  of  engaging 
in  interstate  commerce,  Congress  could  practically 
banish  from  our  soil  evil  conditions  of  labor,  so  far  as 
such  conditions  can  be  affected  by  legislation,  just  as 


UNIFORM  COMMERCIAL  REGULATION 


93 


it  has  banished  the  demoralizing  lottery  and  poisonous, 
impure,  and  adulterated  food  products. 

V.  The  Power  of  the  States  to  prohibit  the 
Introduction  and  Sale  of  Articles 

It  has  been  pointed  out  that  a  state  has  no  power, 
in  the  absence  of  Congressional  action,  to  prohibit 
the  sale  in  the  state  of  what  the  Supreme  Court  con¬ 
siders  to  be  an  article  of  foreign  or  interstate  com¬ 
merce.  Such  an  article  is  one  which,  in  the  opinion 
of  the  court,  is  made  the  subject  of  purchase  and 
sale  in  the  ordinary  course  of  trade,  and  is  at  the  same 
time  in  the  original  package  in  which  it  has  been 
brought  into  the  state  and  in  the  hands  of  the  person 
who  brought  it  in.1  But  it  has  been  held  that  Con¬ 
gress  may  constitutionally  provide  that  such  an 
article  may,  on  its  arrival  in  the  state,  be  subject  to 
the  police  power  of  the  state.2  Congress  may  there¬ 
fore  subject  to  state  regulation  any  article  of  foreign 
or  interstate  commerce. 

Further,  the  Supreme  Court  has  indicated  in  a 
number  of  cases  that,  notwithstanding  the  grant  of 
the  commerce  power  to  Congress,  the  states  have  the 
right  to  prohibit  the  introduction  or  sale  within  their 
borders  of  any  article  which  by  reason  of  its  un¬ 
merchantable  condition  they  deem  prejudicial  to 
health  or  morals,  and  which  because  of  this  unmer¬ 
chantable  condition  is  not  an  article  of  commerce.3 

1  Leisy  v.  Hardin,  135  U.  S.  100. 

2  In  re  Rahrer,  140  U.  S.  545. 

3  Cf.  Hannibal,  etc.,  Railroad  Company  v.  Husen,  95  U.  S.  465,  and 
Bowman  v.  Chicago  and  Northwestern  Railway  Company,  125  U.  S. 
465,  where  it  is  said  that  a  state  may  exclude  persons  and  animals 


94  SOCIAL  REFORM  AND  THE  CONSTITUTION 


The  court  has  also  held  that  a  state  may  prohibit  the 
sale  in  the  state  of  an  article  which  by  reason  of 
adulteration  is  calculated  to  deceive  an  unwary  pur¬ 
chaser,  although  the  article  be  sold  in  the  original 
package  and  by  the  person  who  brought  it  into  the 
state.1 

In  most  of  the  cases  recognizing  this  power  in  the 
states,  the  state  had  prohibited  the  sale  of  the  article 
in  the  absence  of  Congressional  action  as  to  the 
article  in  question.  In  Plumley  v.  Massachusetts, 
however,  the  article  the  sale  of  which  was  prohibited 
was  oleomargarine  which  had  been  manufactured, 
packed,  and  branded  in  accordance  with  an  act  of 
Congress  regulating  the  manufacture,  sale,  importa¬ 
tion,  and  exportation  of  oleomargarine  and  imposing 
a  tax  thereon.  Notwithstanding  this  action  of  Con¬ 
gress,  the  Supreme  Court  held  that,  because  the  oleo¬ 
margarine  in  question  was  colored  to  imitate  yellow 
butter  manufactured  out  of  unadulterated  milk  or 
cream,  the  state  might  prohibit  its  sale  within  the 
state.2  It  may  accordingly  be  said  that  Congress 

suffering  from  contagious  or  infectious  diseases,  as  well  as  convicts 
or  lunatics  or  other  persons  liable  to  be  a  public  charge ;  also  The 
License  Cases,  5  Howard,  504,  600,  where  it  is  intimated  that  the 
state  may  exclude  an  article  which  “  from  its  nature  does  not  belong 
to  commerce,  or  if  its  condition  from  putrescence  or  other  cause  is 
such  when  it  is  about  to  enter  the  state  that  it  no  longer  belongs  to 
commerce.”  See  also  Asbell  v.  Kansas,  209  U.  S.  251. 

1  Plumley  v.  Massachusetts,  155  U.  S.  461.  Cf.  also  Patterson  v. 
Kentucky,  97  U.  S.  501,  and  Crossman  v.  Lurman,  192  U.  S.  189. 

2  In  this  case  four  Justices  dissented,  and,  in  the  later  case  of 
Schollenberger  v.  Pennsylvania,  171  U.  S.  1,  it  was  held  that  the 
state  might  not  prohibit  the  sale  of  all  oleomargarine.  In  this  last 
case,  the  court  refers  to  the  act  of  Congress  with  reference  to  oleo¬ 
margarine  and  says:  “Any  legislation  of  Congress  upon  the  subject 
must  of  course  be  regarded  by  this  court  as  a  fact  of  the  first  impor- 


UNIFORM  COMMERCIAL  REGULATION 


95 


may  not,  in  the  exercise  of  its  power  to  regulate  com¬ 
merce,  force  a  state  to  permit  the  sale  within  its 
borders  of  an  article  which  by  reason  of  its  condition 
is  deleterious  to  the  public  health,  or  by  reason  of  its 
appearance  is  liable  to  deceive  the  unwary  purchaser, 
and  which,  therefore,  is  not  an  article  of  commerce.1 

Finally,  it  is  to  be  remembered  that  Congress  does 
not  possess  any  police  power  apart  from  that  which 
is  incident  to  its  power  over  interstate  and  foreign 
commerce.  Thus  it  has  been  held  that,  while  Con¬ 
gress  may  punish  any  one  who  brings  to  the  United 
States  any  alien  woman  for  an  immoral  purpose,  it 
may  not  punish  one  who  keeps  or  harbors  such  a 
woman  within  three  years  after  she  is  brought  here.2 

VI.  Conclusions 

In  summarizing  the  conclusions  which  may  be 
drawn  from  an  examination  of  the  decisions  of  the 
Supreme  Court  upon  the  power  of  Congress  to  regu¬ 
late  commerce  with  foreign  nations  and  among  the 
several  states,  it  seems  advisable  to  present  them 
under  the  following  heads :  first,  what  is  commerce ; 
second,  what  is  interstate  commerce ;  and  third,  what 
is  the  meaning  of  the  word  “  regulate.” 

(i)  Commerce,  as  a  subject  of  Congressional  regu¬ 
lation,  embraces,  in  the  first  place,  transportation 

tance.  If  Congress  has  affirmatively  pronounced  the  article  to  be 
a  proper  subject  of  commerce,  we  should  properly  be  influenced  by 
that  declaration.”  i 

1  Cf.  also  Patapsco  Guana  Company  v.  North  Carolina  Board  of 
Agriculture,  171  U.  S.  345,  and  Reid  v.  Colorado,  187  U.  S.  137,  which 
recognizes  the  right  of  the  state  in  the  absence  of  action  by  Congress 
to  pass  bona  fide  nondiscriminating  inspection  laws. 

2  Keller  v.  United  States,  213  U.  S.  138. 


g6  SOCIAL  REFORM  AND  THE  CONSTITUTION 


both  by  water  and  by  land  and  the  means  and  in¬ 
strumentalities  of  transportation.  Commerce  there¬ 
fore  includes  not  merely  the  act  of  transporting  per¬ 
sons  or  articles  from  one  place  to  another,  but  both 
natural  and  artificial  land  and  water  routes  and  their 
terminals,  such  as  harbors,  the  vehicles  by  which  the 
act  of  transporting  is  performed,  and  the  persons, 
both  carriers,  shippers,  and  consignees  on  the  one 
hand,  and  employers  and  employed  on  the  other, 
engaged  in  the  act  of  transporting.  Commerce  em¬ 
braces,  in  the  second  place,  purchases  and  sales  and 
the  negotiations  entered  into  in  order  to  lead  thereto 
of  all  articles  ordinarily  made  the  subject  of  trade, 
and  agreements  for  such  purchases  and  sales,  both 
between  the  sellers  among  themselves  and  the  pur¬ 
chasers  among  themselves  on  the  one  hand,  and  the 
sellers  and  purchasers  with  each  other  on  the  other 
hand.  Commerce,  therefore,  does  not  embrace  manu¬ 
facturing;  although  the  tendency  of  the  courts  is  to 
include  manufacturing  where  its  regulation  is  neces¬ 
sary  to  the  effective  regulation  of  what  is  admittedly 
commerce.  Commerce  does  not  embrace  the  ordi¬ 
nary  internal  police  of  the  states,  not  incidental  to 
commerce  transcending  the  borders  of  a  single  state; 
although  there  are  a  few  cases  which  hold  that  Con¬ 
gress  may  forbid,  in  the  exercise  of  the  commerce 
power,  acts,  such  as  the  plundering  of  wrecked  vessels, 
even  where  such  plundering  has  taken  place  above 
high-water  mark  and  therefore  within  the  jurisdiction 
of  a  state,  and  agreements  not  to  compete  in  the  pur¬ 
chase  of  articles  entering  into  commerce. 

(2)  Commerce  among  the  states  is,  first,  that  com¬ 
merce,  as  above  described,  which  originates  in  one 


UNIFORM  COMMERCIAL  REGULATION 


97 


state  and  terminates  in  another  state;  and  second, 
that  commerce,  as  above  described,  which  originates 
and  terminates  in  the  same  state  and  the  matters 
incident  to  that  commerce,  where  the  regulation  of 
such  commerce  and  those  incidents  is  necessary  to  the 
effective  regulation  by  Congress  of  what  is  recognized 
to  be  interstate  commerce. 

(3)  The  power  to  regulate  commerce  includes  the 
powers :  first,  to  construct  or  provide,  even  by  the 
chartering  of  corporations,  for  the  construction  of 
commercial  routes  by  water  and  by  land,  and  to  lay 
down  the  rules  to  be  observed  by  those  making  use 
of  such  routes;  second,  to  determine  the  legal,  in¬ 
cluding  the  contractual,  relations  which  shall  exist 
between  shippers  and  carriers,  between  carriers  and 
their  employees,  between  sellers,  between  purchasers, 
and  between  sellers  and  purchasers ;  third,  to  pro¬ 
hibit  commerce  in  certain  articles  and  certain  methods 
of  carrying  on  commerce  and  to  license  those  engaged 
in  commerce ;  and  fourth,  to  subject  interstate  com¬ 
merce,  in  certain  respects,  to  regulation  by  the  states. 
The  exercise  of  all  these  powers  is,  however,  subject 
to  the  limitations  of  the  constitution,  such  as  the  fifth 
amendment,  protecting  private  rights.  Furthermore, 
the  power  to  regulate  does  not  include  the  right  posi¬ 
tively  to  regulate  purely  intrastate  matters  which 
have  no  relation  to  interstate  commerce,  nor  the 
right  to  force  upon  a  state  an. article  which  by  reason 
of  its  condition  is  not  an  article  of  commerce. 

Finally,  it  is  to  be  observed  that  there  has  ap¬ 
parently  been  less  objection,  both  on  the  part  of  the 
public,  as  evidenced  by  the  smaller  number  of  litigated 
cases,  and  on  the  part  of  the  Supreme  Court,  as  evi- 


g8  SOCIAL  REFORM  AND  THE  CONSTITUTION 


denced  by  its  decisions,  to  accord  to  Congress  a  wide 
power  over  navigation  than  to  accord  to  it  such  a 
power  over  land  commerce.  The  explanation  is  prob¬ 
ably  to  be  found,  in  part,  in  the  fact  that  the  power 
of  Congress  over  navigation  was  defined  by,  or  at 
least  under  the  influence  of,  Chief  Justice  Marshall, 
whose  belief  in  wide  national  powers  is  so  well  known, 
and,  in  part,  in  the  desire  of  the  people  of  the  states 
that  Congress  should  improve  harbors  and  waterways. 

The  attempt  has  been  made  in  this  chapter  to  show 
that  there  is  no  real  basis,  either  in  the  nature  of  the 
subject  or  in  the  decisions  of  the  Supreme  Court,  for 
a  distinction  between  commerce  by  water  and  com¬ 
merce  by  land,  and  to  indicate  that  the  Supreme 
Court  will  probably  be  forced  by  the  necessities  of 
the  situation  to  apply  to  commerce  by  land  the  same 
rules  which  it  has  in  the  past  applied  to  commerce  by 
water,  even  if  thereby  the  field  which  we  have  become 
accustomed  to  regard  as  subject  to  state  rather  than 
to  Congressional  action  be  seriously  narrowed  and 
that  popularly  recognized  as  in  the  jurisdiction  of  Con¬ 
gress  be  greatly  enlarged.  Indeed,  it  is  not  beyond 
the  bounds  of  probability  that  the  distinction  between 
interstate  and  intrastate  commerce  on  land  will  be 
abandoned  as  it  has  been  practically  abandoned  in 
the  case  of  navigation.1  If  the  distinction  between 


1  The  fineness  of  distinction  to  which  the  Supreme  Court  is  now 
sometimes  forced  in  order  to  differentiate  interstate  from  intrastate 
commerce  is  well  exemplified  by  the  cases  of  McNeill  v.  Southern 
Railway  Co.,  202  U.  S.  543  and  Missouri  Pacific  Railway  Co.  v. 
Larrabee  Flour  Mills  Co.,  21 1  U.  S.  612.  In  the  former  the  hauling 
of  cars  loaded  with  interstate  commodities  to  a  private  siding  was 
treated  as  interstate  commerce.  In  the  latter,  the  hauling  of  empty 
cars  to  a  private  siding  for  the  purpose  of  loading  them  with  a  com- 


UNIFORM  COMMERCIAL  REGULATION 


99 


interstate  and  intrastate  commerce  is  abandoned,  a 
great  influence  will  be  available  for  making  our  politi¬ 
cal  system  conform  to  existing  economic  conditions, 
and  necessary  political  centralization  can  be  secured 
without  that  formal  amendment  of  the  constitution 
which  now  seems  to  be  so  nearly  impossible. 

modity  to  be  shipped  out  of  the  state  was  held  to  be  intrastate  com¬ 
merce.  In  the  former  the  state  had  no  jurisdiction;  in  the  latter  it 
had. 


CHAPTER  <  III 


THE  POWER  OF  CONGRESS  TO  CHARTER  INTER¬ 
STATE  COMMERCE  CORPORATIONS1 

The  main  thesis  of  this  chapter  is  that  Congress 
has  authority,  first,  to  create  commercial  corporations 
to  carry  on  an  interstate  and  foreign  business,  to  con¬ 
fer  upon  such  corporations  authority  to  manufacture 
articles  to  be  passed  into  such  commerce  and  to 
exempt  all  their  operations  and  private-legal  relations 
from  any  state  control  whatsoever;  and  second,  to 
license  individuals  as  well  as  corporations  for  a  like 
purpose  and  to  confer  upon  them  similar  exemptions 
from  state  control. 

This,  however,  is  only  a  part  of  a  wider  power,  viz. 
the  power  of  Congress  to  create  a  system  of  inter¬ 
state  and  foreign  commerce  and  to  license  the  pro¬ 
duction  of  articles  to  be  passed  into  such  commerce 
under  exclusively  federal  control.  This  wider  power 
includes  also  the  power  of  excluding  from  such  com¬ 
merce  all  individuals  or  corporations  not  conforming 
to  the  conditions  laid  down  by  Congress,  as  well  as  all 
goods  not  produced  in  conformity  to  such  conditions, 
it  being  understood,  always,  that  these  conditions 

1  This  chapter  did  not  constitute  one  of  the  Kennedy  Lectures,  but 
is  here  added  to  complete  the  discussion  of  the  topics  considered  in 
Chapter  II  and  elsewhere  in  the  book.  It  was  prepared  under  the 
direction  of  the  author  by  Mr.  Sidney  D.  Moore  Hudson. 


ioo 


FEDERAL  INCORPORATION 


IOI 


must  not  violate  constitutionally  protected  private 
rights. 

All  discussion  of  the  constitutionality  of  laws 
passed  by  Congress  providing  for  the  erection  of  cor¬ 
porations  to  carry  on  interstate  or  foreign  commerce 
must  start  from  the  controversy  which  was  waged 
with  regard  to  the  first  and  second  United  States 
banks,  and  which  received  its  judicial  determination 
in  the  case  of  McCulloch  v.  Maryland,1  affirming  the 
constitutionality  of  the  second  bank.  Before  con¬ 
sidering  this  decision,  however,  it  will  be  well  to  ex¬ 
amine  Hamilton’s  cabinet  opinion,  which  convinced 
Washington  of  the  constitutionality  of  federal  incor¬ 
poration  as  applied  to  the  first  bank.  The  similarity 
of  the  views  of  Hamilton  and  Marshall,  often  extend¬ 
ing  to  a  very  close  agreement  of  language,  reveals 
Marshall’s  indebtedness  to  Hamilton.  This  fact  gives 
to  Hamilton’s  argument  an  almost  judicial  authority, 
in  addition  to  its  intrinsic  value  as  the  best  discussion 
of  federal  incorporation  to  be  found  in  our  political 
and  juristic  literature.2 

The  essential  basis  of  Hamilton’s  argument  is  to  be 
found  in  the  proposition  —  “ inherent  in  the  very  defi¬ 
nition  of  government”  —  “that  every  power  vested 
in  a  government  is  in  its  nature  sovereign .”  3  From 
this  fact  it  follows  that  “all  the  means  requisite  and 
fairly  applicable  to  the  attainment  of  the  ends  of 
such  power”  may  be  used  in  carrying  it  into  effect, 

1  4  Wheaton,  316. 

2  Cf.  Farmers’  National  Bank  v.  Deering,  91  U.  S.  29.  Here  the 
court  couples  the  reasoning  of  Hamilton  with  that  of  Marshall  as 
affording  justification  for  the  principle  of  the  National  Bank  Act 
of  1864. 

3  Hamilton’s  Works,  Federal  Edition,  Vol.  Ill,  p.  446. 


102  SOCIAL  REFORM  AND  THE  CONSTITUTION 


provided  they  are  not  precluded  by  express  restric¬ 
tions  and  exceptions  found  in  the  constitution.  Ac¬ 
cordingly,  there  can  be  no  “abstract”  question  as  to 
the  power  of  the  United  States  to  erect  corporations. 
Such  erections  are  an  unquestionable  incident  of  sov¬ 
ereign  power.1  The  only  limitation  upon  the  power 
is  found  in  the  fact  that  corporations  chartered  by 
the  United  States  must  bear  a  relation  to  the  attain¬ 
ment  of  those  objects  over  which  the  national  gov¬ 
ernment  has  authority.  An  illustration  of  an  improper 
object  for  the  erection  of  a  federal  corporation  is  the 
superintendence  of  the  police  of  Philadelphia,  since 
the  national  government  has  no  control  over  that 
matter.2  Among  the  illustrations  of  proper  objects 
are  foreign  and  interstate  commerce,  because  “it  is 
the  province  of  the  federal  government  to  regulate 
these  objects,  and  because  it  is  incident  to  a  general 
sovereign  or  legislative  power  to  regulate  a  thing,  to 
employ  all  the  means  which  relate  to  its  regulation  to 
the  best  and  greatest  advantage.” 

The  power  of  erecting  a  corporation  is  necessarily 
implied  in  the  power  of  regulating  an  object,  since  a 
corporation  is  but  a  “  quality ,  capacity ,  or  means  to  an 
end,”  and  not  “some  great ,  independent ,  substantive 
thing”  3  Nor  is  there  requisite  any  particular  degree 
of  necessity  as  a  means  to  an  end,  but  only  a  “rela¬ 
tion  between  the  nature  of  the  means  employed 
towards  the  execution  of  a  power,  and  the  object  of 
that  power.”  Again,  Hamilton  formulates  as  a 
criterion  of  constitutionality  the  principle  that  “if 
the  end  be  clearly  comprehended  within  any  of  the 

1  Hamilton’s  Works,  Federal  Edition,  Vol.  Ill,  p.  448. 

2  Ibid.,  p.  450.  3  Ibid.,  p.  451. 


FEDERAL  INCORPORATION 


103 


specified  powers,  and  if  the  measure  have  an  obvious 
relation  to  that  end ,  and  is  not  forbidden  by  any  par¬ 
ticular  provision  of  the  constitution,  it  may  safely 
be  deemed  to  come  within  the  compass  of  the  national 
authority.”1 

Finally,  Hamilton  cites,  as  a  clear  illustration  of  the 
validity  of  federal  incorporation,  the  supposed  case  of 
a  company  formed  for  the  development  of  a  new 
branch  of  foreign  trade.  Such  an  incorporation  is  a 
means  in  general  use  among  foreign  countries,  and, 
Hamilton  inquires,  why  may  not  the  United  States 
11  constitutionally  employ  the  means ,  usual  in  other 
countries,  for  attaining  the  ends  intrusted  to  them”  ?  2 

On  the  broad  basis  of  Hamilton’s  argument  rests 
Marshall’s  opinion,  in  the  case  of  McCulloch  v.  Mary¬ 
land.3  The  key  to  Marshall’s  reasoning  is  to  be 
found  in  the  proposition  that  the  general  powers  in¬ 
trusted  to  the  federal  government,  with  their  vital 
connection  with  the  well-being  of  the  nation,  may  be 
regarded  as  carrying  with  them  ample  means  for  their 
successful  execution.  He  points  out  that  “  the  power 
being  given,  it  is  the  interest  of  the  nation  to  facilitate 
its  execution.  It  can  never  be  their  interest,  and 
cannot  be  presumed  to  have  been  their  intention,  to 
clog  and  embarrass  its  execution  by  withholding  the 
most  appropriate  means.”  Applied  to  the  case  before 
the  court,  this  means  that  the  erection  of  a  corpora¬ 
tion  not  being  forbidden,  such  an  erection  is  permis¬ 
sible  whenever  “  essential  to  the  beneficial  exercise 
of  those  powers.”  The  words  “  necessary  and  proper  ” 
include  “any  means  calculated  to  produce  the  end.”  4 


1  Ibid.,  p.  458. 

2  Ibid.,  p.  487* 


3  4  Wheaton,  316. 

4  Ibid.,  p.  413. 


104  SOCIAL  REFORM  AND  THE  CONSTITUTION 


This  meaning  of  “  necessary  ”  is  enforced  by  the  dis¬ 
tinction  between  a  constitution  intended  for  per¬ 
manence  and  adaptability  to  changing  circumstances 
and  a  mere  legal  code.1  A  narrower  meaning  would 
deprive  the  legislature  of  discretion  and  the  power  to 
take  advantage  of  experience  and  to  fit  its  legislation 
to  changing  circumstances.  After  pointing  out  that 
the  “ necessary  and  proper”  clause  purports,  from  its 
location  in  the  constitution,  to  be  a  power  granted 
and  not  a  limitation  upon  congressional  authority, 
Marshall  concludes  this  part  of  the  argument  with 
these  trenchant  words :  — 

“But  we  think  the  sound  construction  of  the  constitution 
must  allow  to  the  national  legislature  that  discretion  with  respect 
to  the  means  by  which  the  powers  it  confers  are  to  be  carried 
into  execution,  which  will  enable  that  body  to  perform  the  high 
duties  assigned  to  it,  in  the  manner  most  beneficial  to  the  people. 
Let  the  end  be  legitimate,  let  it  be  within  the  scope  of  the  con¬ 
stitution,  and  all  means  which  are  appropriate,  which  are  plainly 
adapted  to  that  end,  which  are  not  prohibited,  but  consist  with 
the  letter  and  spirit  of  the  constitution,  are  constitutional.” 2 

Marshall  then  shows  that  a  corporation  is  an  ap¬ 
propriate  means  for  carrying  out  the  powers  intrusted 
to  the  federal  government,  and  that  a  banking  corpora¬ 
tion  is  an  appropriate  fiscal  instrument.  It  should  be 
noted  here  that  Marshall,  like  Hamilton,  does  not 
regard  the  bank  as  a  peculiar  case  standing  upon  any 
unusually  strong  ground,  but  holds  rather  that  the 
power  to  charter  corporations  “may  be  employed  in¬ 
discriminately  with  other  means  to  carry  into  execu¬ 
tion  the  powers  of  the  government.”  3 

1  4  Wheaton,  415.  2  Ibid.,  p.  421. 

3  Ibid.,  p.  422.  It  will  be  noted  that  there  is  here  no  suggestion 
of  any  superior  sanctity  attached  to  a  corporation  which  has  a  “polit¬ 
ical”  connection  with  the  government. 


FEDERAL  INCORPORATION 


io5 

The  degree  of  utility  or  necessity  is  not  a  matter 
for  judicial  consideration.  “  Where  the  law  is  not 
prohibited  and  is  really  calculated  to  effect  any  of  the 
objects  intrusted  to  the  government,  to  undertake 
here  to  inquire  into  the  degree  of  its  necessity  would 
be  to  pass  the  line  which  circumscribes  the  judicial 
department  and  to  tread  on  legislative  ground.”  It 
may  accordingly  be  affirmed  that,  where  the  measures 
of  Congress  have  reasonable  relation  to  the  attain¬ 
ment  of  the  legitimate  objects  of  the  federal  govern¬ 
ment,  their  constitutionality  will  be  recognized. 

In  the  case  of  Osborn  v.  The  Bank  of  the  United 
States,1  Marshall  considers  an  argument  which,  he 
thinks,  if  representing  the  true  facts  regarding  the 
nature  of  the  bank,  not  only  would  justify  taxation  by 
the  states  of  the  operations  of  the  bank,  but  would 
also  show  that  the  incorporation  of  the  bank  was  un¬ 
constitutional.  He  accordingly  once  more  examines 
the  grounds  upon  which  the  constitutionality  of  the 
incorporation  may  be  upheld.  In  this  discussion  some 
phrases  appear  which  may  easily  give  rise  to  the  idea 
that  these  grounds  are  much  more  limited  than  we 
have  found  them  to  be  in  the  above  discussion  of  the 
McCulloch  case,  and  that  something  in  the  nature  of 
a  distinctly  “political”  connection  between  the  gov¬ 
ernment  of  the  United  States  and  any  corporation 
erected  by  it  is  essential.  Careful  consideration,  how¬ 
ever,  will  show  any  such  idea  to  be  unfounded,  and 
will  demonstrate  the  invalidity  of  all  those  arguments 
against  any  federal  incorporation  which  are  founded 
upon  the  “private”  nature  either  of  the  motives 
actuating  the  company  or  of  the  operations  which  it 

1  9  Wheaton,  738. 


106  SOCIAL  REFORM  AND  THE  CONSTITUTION 


carries  on,  provided  that  the  purpose  of  the  govern¬ 
ment  is  the  facilitation  of  its  control  over,  and  the 
better  regulation  of,  any  matter  intrusted  to  its  care. 

The  position  of  appellant’s  counsel  in  this  case,  as 
stated  by  Marshall,  was  that  “the  right  of  a  state  to 
tax  the  bank  is  laid  in  the  supposed  character  of  that 
institution.  The  argument  supposes  the  corporation 
to  have  been  originated  for  the  management  of  an 
individual  concern,  to  be  founded  upon  contract  be¬ 
tween  individuals,  having  private  trade  and  profit  for 
its  great  and  principal  object.” 1  It  was  alleged 2 
that  “banking  is,  in  its  nature,  a  private  trade  .  .  . 
the  whole  is  a  private  concern ;  the  capital  is  private 
property;  the  business  is  a  private  and  individual 
trade ;  the  convenience  and  profit  of  private  men  the 
end  and  object.”  The  bank  was  classed  with  “insur¬ 
ance,  canal,  bridge,  and  turnpike  companies,”  in  all  of 
which  cases  the  corporations  were  alleged  to  be  private, 
although  “the  uses  may,  in  a  certain  sense,  be  called 
public.”  The  bank  was  carefully  distinguished  from 
the  post  office,  the  business  of  which  “is  of  a  public 
character”  and  the  charge  of  which  “is  expressly  con¬ 
ferred  upon  Congress  by  the  constitution.”  It  was 
alleged  that,  although  the  subordinate  agents  of  the 
post  office  are  invested  with  the  character  of  public 
officers,  the  contractors  who  carry  the  mails  are  not, 
and  that  the  horses  and  carriages  which  they  use  for 
this  purpose  are  liable  to  state  taxation,  since  they 
are  used  for  the  private  profit  of  the  contractor.  And 
the  case  of  the  bank  is  alleged  to  be  even  more  clear, 
since  the  chief  use  of  the  horses  and  wagons  is  for 

1  9  Wheaton,  p.  859. 

2  Argument  of  Mr.  Hammond ;  ibid.,  pp.  766  et  seq. 


FEDERAL  INCORPORATION 


107 


public  business,  while  the  public  business  of  the  bank 
is  subordinate  and  incidental. 

The  argument  for  a  distinction  (resting  upon  the 
basis  of  a  company’s  motive  as  being  primarily  or 
exclusively  the  securing  of  private  gain)  between  in¬ 
strumentalities  of  the  government  (using  “  instru¬ 
mentality  ”  in  a  narrow  sense)  and  private  corporations 
is  certainly  here  set  forth  with  all  possible  cogency. 
Marshall  indeed  grants  that  the  conclusion  reached 
would  result  from  the  premises  assumed,  but  he  denies 
the  validity  of  the  premises.  The  bank  is  to  be  con¬ 
sidered  “as  a  public  corporation,  created  for  public 
and  national  purposes.” 

“  That  the  mere  business  of  banking  is,  in  its  own  nature,  a 
private  business  and  may  be  carried  on  by  individuals  or  com¬ 
panies  having  no  political  connection  with  the  government  is 
admitted ;  but  the  bank  is  not  such  an  individual  or  company. 
It  was  not  created  for  its  own  sake  or  for  private  purposes. 
It  has  never  been  supposed  that  Congress  could  create  such  a 
corporation.  The  whole  opinion  of  the  court,  in  the  case  of 
McCulloch  v.  The  State  of  Maryland,  is  founded  upon  and 
sustained  by  the  idea  that  the  bank  is  an  instrument  which  is 
*  necessary  and  proper  for  carrying  into  effect  the  powers  vested 
in  the  government  of  the  United  States.’  ” 

Certain  phrases  in  the  above  quotation  might  pos¬ 
sibly  appear,  prima  facie ,  to  support  the  theory  that 
federal  incorporation  must  be  very  closely  limited  in 
scope.  But  more  careful  examination  will  show  that 
such  an  interpretation  would  be  erroneous.  Marshall’s 
statement  that  the  bank  is  not  to  be  considered  as  a 
private  corporation,  with  private  gain  as  its  principal 
object,  means  simply  that  the  purpose  of  Congress  in 
incorporating  the  bank  was,  not  to  aid  the  share¬ 
holders  in  securing  a  private  profit,  but  rather  to 


Io8  SOCIAL  REFORM  AND  THE  CONSTITUTION 


secure  a  useful  means  for  providing  for  the  national 
welfare  in  a  matter  intrusted  to  the  care  of  Congress. 
The  context,  particularly  the  admission  that  banking 
is  in  its  own  nature  a  private  business,  demonstrates 
this.  Furthermore,  it  would  be  absurd  to  understand 
Marshall  to  deny  that  the  principal  object  of  the  share¬ 
holders  was  private  gain.  Nor  can  he  mean,  what 
was  not  true,  that  the  principal  business  of  the  bank 
was  directly  governmental  and  its  private  business 
only  incidental.  The  point  of  Marshall’s  contention 
is  that  the  bank  “was  not  created  for  its  own  sake 
.  .  .  [but]  is  an  instrument  ...  for  carrying  into 
effect  the  powers  vested  in  the  government  of  the 
United  States.”  Private  gain  is  indisputably  the 
motive  of  the  stockholders,  but  the  criterion  of  con¬ 
stitutionality  is  rather  the  purpose  of  Congress,  and 
this  is  a  public  purpose. 

A  more  plausible  argument  may  be  founded  upon 
Marshall’s  use  of  the  word  “political.”  What  is  the 
true  import  of  Marshall’s  distinction  between  banking 
as  carried  on  by  “individuals  or  companies  having  no 
political  connection  with  the  government”  and  bank¬ 
ing  as  carried  on  by  individuals  or  companies  which 
do  have  a  political  connection  ?  This  distinction  may 
have  either  of  two  meanings. 

It  may  mean  that  the  bank  may  be  regarded  as  a 
quasi-governmental  body,  performing  certain  ordinary 
governmental  functions  which  must  otherwise  be  per¬ 
formed  by  the  government  itself.  If  this  interpreta¬ 
tion  correctly  represents  Marshall’s  meaning,  it  does 
not  at  all  follow  that  he  means  to  imply  that  no 
federal  incorporation  is  permissible  where  the  corpora¬ 
tion  does  not  discharge  this  kind  of  political  function. 


FEDERAL  INCORPORATION 


109 

In  this  decision  he  is  explaining  further  his  opinion  in 
McCulloch  v,  Maryland,  and  no  such  limitation  is  to 
be  found  in  that  opinion.  The  argument  there  is  that 
federal  incorporation  may  be  used  indiscriminately  in 
the  carrying  into  effect  of  the  powers  vested  in  the 
federal  government.  The  power  to  incorporate  is  an 
incident  of  sovereignty,  no  more  limited  in  the  case 
of  the  United  States  than  in  that  of  the  states;  and 
the  states  are,  of  course,  not  limited  in  their  creation 
of  corporations  to  those  which  are  to  perform  quasi- 
go  vernmental  functions.  If  anything  further  were 
needed  to  show  that,  if  Marshall  is  using  the  word 
“political”  in  this  very  narrow  sense,  he  is  not  in¬ 
tending  to  indicate  a  limitation  upon  the  general 
federal  power  of  creating  corporations,  but  is  merely 
giving  the  most  striking  particular  justification  of  the 
bank,  corroboration  is  found  in  his  assertion  that  “it 
has  never  been  supposed”  that  Congress  could  create 
such  a  corporation  as  a  banking  corporation  having 
no  “political ”  connection  with  the  government.  Con¬ 
sidering  the  evident  close  dependence  of  Marshall’s 
argument  upon  that  of  Hamilton  and  the  celebrity 
of  Hamilton’s  opinion,  it  is  past  all  belief  that  Mar¬ 
shall  could  assert  that  anything  which  formed  the  very 
core  of  Hamilton’s  argument  “has  never  been  sup¬ 
posed.” 

It  might  accordingly  be  conceded  that  Marshall 
used  the  word  “political”  in  this  narrow  sense  with¬ 
out  at  all  weakening  the  broad  basis  of  his  own  and 
Hamilton’s  arguments.  It  would  certainly  seem, 
however,  that  he  used  the  word  in  a  much  wider 
sense,  covering  the  entire  field  of  the  relation  of 
federal  incorporation  as  a  means  to  the  accomplish- 


no  SOCIAL  REFORM  AND  THE  CONSTITUTION 


ment  of  ends  within  the  purview  of  the  federal  gov¬ 
ernment.  Thus  used,  “political”  would  be  synony¬ 
mous  with  “public,”  connoting  the  existence  of  a 
public  motive.  Thus  interpreted,  Marshall’s  state¬ 
ment  means  simply  that  any  incorporation  must  bear 
a  real  relation  to  the  proper  regulation  of  some  matter 
intrusted  to  the  care  of  the  federal  government.  It 
is  submitted  that  this  interpretation  of  Marshall’s 
use  of  the  word  “political”  is  in  more  obvious  agree¬ 
ment  with  the  context,  which  shows  it  to  have  been 
an  elaboration  of  the  doctrine  of  McCulloch  v.  Mary¬ 
land.  Furthermore,  it  is  a  natural  signification  of  a 
word  admittedly  ambiguous  and  capable  of  diverse 
meanings. 

Marshall  remarks  that  the  right  of  doing  a  private 
business  is  essential  to  the  usefulness  of  the  bank; 
that 

“if  it  be  as  competent  to  the  purposes  of  the  government  with¬ 
out  as  with  this  faculty,  there  will  be  much  difficulty  in  sustain¬ 
ing  that  essential  part  of  the  charter.  If  it  cannot,  then  this 
faculty  is  necessary  to  the  legitimate  operations  of  government 
and  was  constitutionally  and  rightfully  engrafted  on  the  institu¬ 
tion.”  1 

This  principle  that  whatever  powers  are  essential, 
in  order  that  a  corporation  may  be  completely  fitted 
to  serve  the  ends  for  which  the  government  creates  it, 
may  be  constitutionally  conferred,  is  of  distinct  appli¬ 
cability  to  the  conferring  of  the  power  upon  federal 
corporations,  created  to  engage  in  interstate  com¬ 
merce,  to  manufacture  the  products  which  are  to  pass 
into  such  interstate  commerce;  since  otherwise  the 


1  9  Wheaton,  864. 


FEDERAL  INCORPORATION 


III 


ends  which  make  the  incorporation  legitimate  cannot 
be  efficiently  secured. 

Marshall  points  out  also  that  it  is  not  the  corporate 
character  of  the  bank  which  exempts  its  operations 
from  state  control.  The  exemption  arises  because 
“the  business  of  the  bank  constitutes  its  capacity  to 
perform  its  functions,  as  a  machine  for  the  money 
transactions  of  the  government.  Its  corporate  char¬ 
acter  is  merely  an  incident  which  enables  it  to  transact 
that  business  more  beneficially.” 1 

Any  operations  of  a  federal  corporation  or  licensee 
which  are  essential  to  the  fulfillment  of  the  national 
purpose  for  the  sake  of  which  the  charter  or  license  is 
granted  are  exempt  from  state  control.  The  question 
of  such  essentiality  is  primarily  one  for  legislative 
determination.2  But  Marshall’s  own  criterion  is 
simply  the  fact  that  any  particular  power  conferred 
gives  to  the  corporation  a  superior  fitness  as  an  instru¬ 
ment  for  the  carrying  into  effect  of  national  purposes. 
With  regard  to  a  particular  argument  of  counsel,  he 
points  out  that  the  acts  of  federal  contractors  in  ful¬ 
filling  their  contracts  are  not  within  state  control. 

Considering  the  decision  as  a  whole,  it  may  be  said 
that  it  does  not  at  all  limit  the  principles  advanced  in 
Hamilton’s  cabinet  opinion  and  laid  down  judicially, 
in  essentially  the  same  breadth,  by  Marshall  in 
McCulloch  v.  Maryland.  In  meeting  the  issue  raised 
in  Osborn  v.  The  Bank  of  the  United  States,  as  to  the 
effects  of  the  motive  of  private  gain  as  animating  the 
company,  it  carries  the  argument  explicitly  another 
step  in  advance.  Finally,  in  the  discussion  of  the 
powers  which  may  constitutionally  be  conferred  in 
1  Ibid.,  p.  862.  2  Ibid.,  p.  864. 


II 2  SOCIAL  REFORM  AND  THE  CONSTITUTION 


order  to  create  a  satisfactory  instrumentality  for  the 
working  out  of  proper  national  purposes,  it  affords 
solid  ground  upon  which  to  rest  the  constitutionality 
of  legislation  conferring  power  to  manufacture  upon 
federally  erected  interstate  commerce  corporations. 

The  constitutionality  of  the  National  Bank  Act  of 
1864  was  maintained  by  the  court  in  the  case  of 
Farmers’  National  Bank  v.  Deering.1 

Aside  from  the  question  of  national  banks,  discus¬ 
sion  of  the  power  of  Congress  to  charter  corporations 
has  been  occasioned  chiefly  by  the  federal  incorpora¬ 
tion  of,  or  the  grant  of  franchises  to,  railroad  companies, 
particularly  in  connection  with  the  development  of 
the  system  of  Pacific  railroads. 

In  the  Pacific  Removal  case,2  the  court  held  that 
the  Union  Pacific  Railroad  Company  was  “strictly  a 
corporation  of  the  United  States.”  It  further  held 
that,  when  powers  granted  by  the  federal  government 
are  inextricably  blended  with  powers  granted  by  the 
states,  the  control  of  Congress  is  determinative  in 
regard  to  the  whole  matter.  In  the  case  of  California 
v.  Central  Pacific  Railroad  Company,3  the  court  held 
not  only  that  the  company  held  federal  franchises,  but 
also  that  the  grant  of  such  franchises  was  constitu¬ 
tional.  It  held,  further,  that  the  authority  of  Con¬ 
gress  to  grant  such  franchises  does  not  rest  solely 
upon  its  power  over  postal  and  military  matters,  but 
also  —  and  upon  this  ground  the  court  laid  most  stress 
—  upon  the  commercial  power.  The  court  said  :  — 

“It  cannot  at  the  present  day  be  doubted  that  Congress, 
under  the  power  to  regulate  commerce  among  the  several  states 
.  .  .  had  authority  to  pass  these  laws.  The  power  to  construct 

1  91  U.  S.  29.  2 115  U.  S.  15,  16.  3  127  U.  S.  1. 


FEDERAL  INCORPORATION 


113 

or  to  authorize  individuals  or  corporations  to  construct  national 
highways  or  bridges  from  state  to  state  is  essential  to  the  com¬ 
plete  control  and  regulation  of  interstate  commerce.’ * 

The  court  pointed  out  that  under  earlier  economic 
conditions,  when  commerce  by  water  was  most  im¬ 
portant,  many  statesmen  doubted  the  power  to  estab¬ 
lish  ways  of  communication  by  land.  But  with  the 
development  of  land  commerce  “a  sounder  considera¬ 
tion  of  the  subject  has  prevailed  and  led  to  the  con¬ 
clusion  that  Congress  has  plenary  power  over  the 
whole  subject”  —  a  power  “very  freely  exercised,  and 
much  to  the  general  satisfaction,”  in  the  creation  of 
the  Pacific  railroad  system. 

If  due  consideration  is  given  to  the  opinions  of 
Hamilton  and  Marshall,  it  can  hardly  be  doubted  that, 
if  Congress  can  grant  franchises,  it  can  create  corpora¬ 
tions,  it  being  understood  in  either  case  that  the  end 
for  which  the  power  is  exercised  is  one  within  the 
competence  of  Congress.  It  should  also  be  noted 
that,  both  in  the  case  just  considered  1  and  in  the 
later  case  of  the  Central  Pacific  Railroad  Company  v. 
California,2  it  is  explicitly  recognized  that  a  railroad 
company  having  federal  franchises  is  an  agent  of  the 
federal  government.  And,  as  the  commerce  power  is 
cited  as  the  chief  authorization  for  such  a  grant,  it  is 
evident  that  the  term  “agent”  may  include  a  cor¬ 
poration  erected  for  the  sake  of  the  facilitation  and 
regulation  of  interstate  commerce.3 

1  Ibid.,  p.  40.  2  162  U.  S.  91,  at  pp.  124,  125. 

3  Federal  incorporation  has  also  been  employed  in  the  case  of  a 
bridge  company.  In  the  case  of  Luxton  v.  North  River  Bridge  Com¬ 
pany  (153  U.  S.  525)  the  incorporation  of  the  company  and  the  au¬ 
thorization  of  the  construction  by  it  of  a  bridge  across  the  North  River 


1 14  SOCIAL  REFORM  AND  THE  CONSTITUTION 


Before  summarizing  and  applying  the  conclusions 
thus  far  reached  regarding  the  federal  power  of  estab¬ 
lishing  corporations,  it  is  well  to  allude  briefly  to  the 
views  of  the  Supreme  Court  as  to  the  effect  upon  con¬ 
stitutional  interpretation  of  changing  industrial  and 
commercial  conditions.  In  the  case  of  In  re  Debs,1 
the  court  points  out  that  the  “  basis  upon  which  rests 
its  [ i.e .  the  federal  government’s]  jurisdiction  over 
artificial  highways  is  the  same  as  that  which  sup¬ 
ports  it  over  the  natural  highways,”  notwithstanding 
the  fact  that  this  jurisdiction  had  previously  been 
exercised  almost  exclusively  over  the  latter.  The 
court  says :  — ■ 

“  Constitutional  provisions  do  not  change,  but  their  operation 
extends  to  new  matters  as  the  modes  of  business  and  the  habits 
of  life  of  the  people  vary  with  each  succeeding  generation.  The 
law  of  the  common  carrier  is  the  same  to-day  as  when  transpor¬ 
tation  on  land  was  by  coach  and  wagon  and  on  water  by  canal- 
boat  and  sailing  vessel,  yet  in  its  actual  operation  it  touches  and 
regulates  transportation  by  modes  then  unknown,  the  railroad 
train  and  the  steamship.  Just  so  is  it  with  the  grant  to  the 
national  government  of  power  over  interstate  commerce.  The 
constitution  has  not  changed.  The  power  is  the  same.  But 
it  operates  to-day  upon  modes  of  interstate  commerce  unknown 
to  the  fathers,  and  it  will  operate  with  equal  force  upon  any  new 
modes  of  such  commerce  which  the  future  may  develop.”  2 

The  same  principle  is  elaborated  with  perhaps  even 
greater  force  and  clarity  by  Justice  Moody,  in  his  dis- 

between  New  York  and  New  Jersey  was  upheld  as  a  valid  exercise 
of  the  commercial  power.  The  court  states,  as  resting  “upon  prin¬ 
ciples  of  constitutional  law,  now  established  beyond  dispute,”  the 
proposition  that  Congress  may  create  a  corporation  “  for  the  pur¬ 
pose  of  promoting  commerce  among  the  states.” 

1  158  U.  S.  564. 

2  158  U.  S.  564,  at  pp.  590  et  seq. 


FEDERAL  INCORPORATION 


US 

sen  ting  opinion  in  the  Employers’  Liability  cases.1 
After  discussing  the  development  of  commerce,  he 
says :  — 

“The  different  kinds  of  commerce  described  (foreign,  Indian, 
interstate),  have  the  common  qualities  that  they  are  more  exten¬ 
sive  than  the  jurisdiction  of  a  single  state  and  liable  to  injury  from 
conflicting  state  laws  and  thereby  are  all  distinguished  from  the 
purely  internal  commerce  of  the  states.  ...  It  was  not  rea¬ 
sonably  to  be  expected  that  a  phenomenon  so  contrary  to  the 
experience  of  mankind,  so  vast,  so  rapidly  developing  and  chang¬ 
ing,  as  the  growth  of  land  commerce  among  the  states,  would 
speedily  be  appreciated  in  all  its  aspects,  or  would  at  once  call 
forth  the  exercise  of  all  the  unused  power  vested  in  Congress  by 
the  commerce  clause  of  the  constitution.  Such  a  phenomenon 
demands  study  and  experience.  The  habit  of  our  people,  accen¬ 
tuated  by  our  system  of  representative  government,  is  not  so 
much  in  legislation  to  anticipate  problems  as  it  is  to  deal  with 
them  after  experience  has  shown  them  to  exist.  So  Congress 
has  exercised  its  power  sparingly,  step  by  step,  and  has  acted 
only  when  experience  seemed  to  require  action.”2 

This  is  the  method  of  constitutional  interpretation 
which  alone  can  preserve  the  true  meaning  and  intent 
of  the  constitution.  If  it  be  not  followed,  the  bank¬ 
ruptcy  of  American  constitutional  interpretation,  as 
its  foundations  were  established  by  Chief  Justice 
Marshall,  will  in  effect  have  arrived,  and  the  intent 
of  the  constitution  will  have  been  sacrificed  to  a 
narrowness  of  vision  which  cannot  be  dignified  even 
by  calling  it  a  worship  of  the  letter  of  the  constitution. 

It  is  evident  that  what  has  been  said  applies  not 
only  to  the  development  of  new  forms  of  commerce, 
but  also  to  changes  which  affect  the  distinction  be- 

1  207  U.  S.  463,  at  pp.  519  et  seq.  It  should  be  noted  that  in  this 
portion  of  his  opinion  Justice  Moody  is  not  dissenting  from  the  pre¬ 
vailing  opinion.  2  Ibid.,  p.  523. 


Il6  SOCIAL  REFORM  AND  THE  CONSTITUTION 


tween  interstate  and  intrastate  commerce.  Under 
the  conditions  of  191 1  many  matters  are  properly  inter¬ 
state  which  in  1789  would  have  been  purely  or  prin¬ 
cipally  intrastate.  This  development  must  be  taken 
into  consideration,  and  all  commerce  which  is,  under 
existing  conditions,  “more  extensive  than  the  juris¬ 
diction  of  a  single  state  and  liable  to  injury  from  con¬ 
flicting  state  laws”  must  be  recognized  as  properly 
under  the  jurisdiction  of  Congress. 

On  the  basis  of  the  conclusions  thus  far  attained,  it 
is  proposed  to  examine,  first,  the  constitutionality  of 
the  erection  of  federal  corporations  having  the  power 
to  engage  in  interstate  commerce.  The  constitution¬ 
ality  of  granting  to  such  corporations  the  power  to 
manufacture  will  be  discussed  later. 

In  order  to  show  the  constitutionality  of  the  erec¬ 
tion  of  federal  corporations  having  the  power  to  carry 
on  any  sort  of  interstate  commerce  —  the  particular 
cases  of  water  and  land  transportation  having  already 
been  decided  affirmatively  —  about  all  that  seems 
necessary  is  the  restatement  of  the  principles  deduced 
from  the  cases  above  examined  regarding  the  federal 
power  of  incorporation,  together  with  a  brief  statement 
of  the  conditions  under  which  alone  a  really  effective 
control  of  interstate  commerce  can  be  established. 

Those  principles  may  be  recapitulated  as  follows  : 
(1)  A  corporation  is  not  an  independent  end,  but  simply 
a  means  of  attaining  an  end.  (2)  The  creation  of  a 
corporation  is  not  a  great  and  unusual  matter,  re¬ 
quiring  special  justification,  but  is  rather  an  ordinary 
incident  of  the  exercise  of  sovereignty,  sovereignty 
being  used  in  the  sense  of  supreme  legislative  power 
over  a  given  matter.  (3)  The  government  of  the 


FEDERAL  INCORPORATION  117 

United  States,  having  such  sovereignty  with  regard 
to  the  matters  intrusted  to  its  care  by  the  federal 
constitution,  may  exercise  with  regard  to  such  matters 
the  power  of  erecting  corporations.  (4)  The  sole  tests 
of  the  validity  of  such  federal  incorporations  are  that 
the  Congressional  purpose  must  be  the  better  exercise 
of  power  over  such  matters,  that  the  acts  of  incorpora¬ 
tion  must  have  an  actual  relation  thereto  sufficiently 
close  to  indicate  that  such  better  exercise  of  power  is 
the  real  purpose  of  Congress,  and,  finally,  that  the 
action  of  Congress  does  not  conflict  with  any  consti¬ 
tutional  prohibition.  (5)  Congress  has  such  sover¬ 
eignty  or  “plenary  power”  to  regulate  interstate  and 
foreign  commerce;  and  in  the  exercise  of  this  power 
it  may  accordingly  erect,  as  in  fact  it  has  erected, 
corporations.  (6)  The  validity  of  the  erection  of 
federal  corporations  being  subject  to  no  tests  other 
than  those  above  mentioned,  and  Congress  being  the 
proper  judge  of  the  degree  of  necessity  for  the  erection, 
no  special  limitations,  such  as  the  existence  of  a  strictly 
“political”  connection  between  the  government  and 
the  corporation  erected,  can  be  assumed  as  a  necessary 
prerequisite  to  Congressional  action.  It  is  submitted 
that  these  principles  are  contained  in  the  decisions 
above  examined. 

It  need  then  be  shown  merely  that  corporations 
carrying  on  interstate  commerce  have  in  fact  a  rela¬ 
tion  to  the  regulation  of  interstate  commerce  suffi¬ 
ciently  close  to  indicate  that  such  regulation  may 
reasonably  be  regarded  as  the  purpose  of  Congress  in 
the  erection  of  the  corporations.  Now  if  corporations 
may  be  erected,  as  has  been  affirmed  in  the  case  of 
railroad  and  bridge  companies,  in  order  to  facilitate 


Il8  SOCIAL  REFORM  AND  THE  CONSTITUTION 


the  carrying  on  of  interstate  commerce  through  the 
provision  of  more  adequate  instrumentalities  thereof, 
why  may  they  not  be  erected  in  order  to  facilitate  it 
by  providing  a  more  efficient  organization  for  those 
who  carry  it  on  —  a  result  which  incorporation  in¬ 
dubitably  accomplishes?  If  it  be  contended  that 
there  is  an  essential  difference  between  bridge  and 
railroad  companies  and  trading  companies,  inasmuch 
as  the  former  have  a  peculiarly  public  nature,  and  the 
latter  are  supposedly  in  less  need  of  facilitation  and 
control,  it  need  only  be  replied  that  the  degree  of 
necessity  is  a  matter  for  the  consideration  of  Congress. 

Although  the  facilitation  of  interstate  and  foreign 
commerce,  through  the  provision  of  a  superior  form 
of  organization  for  the  use  of  those  engaged  therein, 
would  of  itself  amply  justify  federal  incorporation, 
there  is  another  and,  if  possible,  still  clearer  justifica¬ 
tion.  The  public  utility  of  an  efficient  national  con¬ 
trol  over  persons  engaged  in  interstate  and  foreign 
commerce  is  obvious.  The  confusion,  not  to  say 
chaos,  which  results  from  state  incorporation  coupled 
with  attempted  federal  control,  has  been  amply  dem¬ 
onstrated.  And  no  remedy  save  national  incorpora¬ 
tion  has  been  discovered,  nor,  as  may  be  confidently 
affirmed,  can  be  discovered,  which  will  save,  for  the 
benefit  of  the  people  of  the  United  States,  the  “big” 
corporation  with  its  nation-wide  —  indeed  world- wide 
—  ramifications  and  at  the  same  time  subject  it  to  an 
efficient  governmental  control.  It  is  not  necessary  to 
discuss  alternative  plans;  since,  even  admitting  that 
any  of  them  might  prove  satisfactory,  Congress  is 
recognized  to  possess  the  right  to  a  choice  of  means. 

Suggestions,  heard  in  some  quarters,  that  Congress 


FEDERAL  INCORPORATION 


119 


abdicate  its  functions  and  responsibility  as  to  inter¬ 
state  commerce,  that  the  principles  approved  in  regard 
to  the  liquor  trade  in  the  Rahrer  case 1  be  accepted  as 
governing  Congressional  action  in  other  commercial 
matters  and  that  a  clear  field  be  left  to  the  state  police 
power,  are,  aside  from  serious  constitutional  objec¬ 
tions,  chiefly  interesting  as  illustrating  the  utopianism 
of  their  exponents.  Few,  if  any,  wilder  ideas  have 
ever  been  advanced  in  American  politics  than  the 
notion  that  effective  concerted  action  can  be  secured 
from  the  several  states  with  regard  to  matters  of  this 
sort.  Not  until  the  American  people  forget  the  lessons 
of  the  Confederation,  and  of  practically  all  their  inter¬ 
vening  history,  will  any  such  idea  gain  general  ac¬ 
ceptance. 

From  the  judicial  standpoint,  then,  it  is  necessary 
to  show  only  that  the  corporate  form  of  commercial 
organization  is  a  means  to  the  exercise  of  national 
authority  over  interstate  and  foreign  commerce,  and 
a  means  which  bears  such  a  relation  to  the  subject 
matter  of  the  commerce  clause  that  federal  incorpora¬ 
tion  of  trading  companies  may  reasonably  be  regarded 
as  springing  from  a  Congressional  purpose  of  exercising 
control  over  such  commerce.  And  this  much  is 
abundantly  evident,  whether  attention  be  directed  to 
the  facilitation  of  that  commerce  through  the  pro¬ 
vision  of  a  more  efficient  organization  thereof,  or  to 
the  fact  that  such  incorporation  also  provides  an 
agency  for  more  efficient  federal  control.  Either  of 
these  considerations  and,  a  fortiori ,  both  taken  together, 

1  140  U.  S.‘  545 ;  upholding  the  validity  of  an  act  of  Congress  pro¬ 
viding  that  liquors  shipped  into  a  state  should  upon  arrival  therein 
become  subject  to  the  police  power  of  the  state. 


120  SOCIAL  REFORM  AND  THE  CONSTITUTION 


afford  adequate  constitutional  justification  for  federal 
incorporation.  From  the  constitutional  point  of  view 
the  utility  or  nonutility  of  any  alternate  schemes  for 
the  organization  and  control  of  this  commerce  have 
alsolutely  no  bearing  on  the  validity  of  federal  incor¬ 
poration. 

The  next  question  to  be  considered  is  that  of  the 
constitutionality  of  legislation  conferring  upon  federal 
interstate  commerce  corporations  the  power  to  manu¬ 
facture  for  the  sake  of  passing  the  articles  manu¬ 
factured  into  interstate  or  foreign  commerce.  It  is 
well  at  the  outset  to  dispose  of  some  very  plausible, 
but  not,  as  it  would  seem,  at  all  valid,  objections  to 
the  recognition  of  such  power.  These  objections  rest 
upon  the  well-established  principle  that  manufactur¬ 
ing  is  not  per  se  commerce.  It  is  submitted,  however, 
that  this  principle  does  not  render  unconstitutional 
the  conferring  of  the  power  to  manufacture  upon 
federal  corporations  engaged  in  interstate  or  foreign 
commerce. 

The  distinction  between  manufacturing  and  com¬ 
merce  is  best  developed  in  the  case  of  Kidd  v.  Pearson.1 
An  Iowa  statute,  prohibiting  the  manufacture,  except 
for  specified  uses,  of  liquor,  was  held  not  to  be  a  viola¬ 
tion  of  the  federal  power  over  interstate  commerce, 
notwithstanding  its  necessary  economic  relation  to 
such  commerce.  The  court  said :  — 

“No  distinction  is  more  popular  to  the  common  mind,  or 
more  clearly  expressed  in  economic  and  political  literature,  than 
that  between  manufacture  and  commerce.  Manufacture  is 
transformation  —  the  fashioning  of  raw  materials  into  a  change 
of  form  for  use.  The  functions  of  commerce  are  different.  The 


1 128  U.  S.  1. 


FEDERAL  INCORPORATION 


I  21 


buying  and  selling  and  the  transportation  incident  thereto 
constitute  commerce,  and  the  regulation  of  commerce  in  the 
constitutional  sense  embraces  the  regulation  at  least  of  such 
transportation.  ...  If  it  be  held  that  the  term  includes  the 
regulation  of  all  such  manufactures  as  are  intended  to  be  the 
subject  of  commercial  transactions  in  the  future,  it  is  impossible 
to  deny  that  it  would  also  include  all  productive  industries  that 
contemplate  the  same  thing.” 

Thus  interpreted,  commerce  would  embrace  “  every 
branch  of  human  industry”;  for,  asks  the  court:  — 

“Is  there  one  of  them  that  does  not  contemplate  more  or  less 
clearly,  an  interstate  or  foreign  market  ?  Does  not  the  wheat- 
grower  of  the  Northwest,  and  the  cotton  planter  of  the  South, 
plant,  cultivate,  and  harvest  his  crop  with  an  eye  on  the  prices  at 
Liverpool,  New  York,  and  Chicago?”1 

It  is  further  pointed  out  that  it  would  be  impossible 
to  regulate  the  details  of  all  these  productive  enter¬ 
prises  by  “  uniform  legislation  generally  applicable 
throughout  the  United  States”;  and  it  is  asserted 
that  the  “local,  detailed,  and  incongruous  legislation” 
required  for  successful  regulation  would,  if  enacted 
by  Congress,  be  “about  the  widest  possible  departure 
from  the  declared  object”  of  the  commerce  clause. 
Finally,  it  is  said  that  there  would  in  any  case  remain 
the  possibility  that  the  producer  contemplated  an 
intrastate  market;  and  so  “interminable  trouble” 
would  be  caused  by  attempting  to  draw  a  line  be¬ 
tween  state  and  Congressional  regulation  upon  the 
basis  of  the  “secret  and  changeable  intentions  of  the 
producer  in  each  and  every  act  of  production.”  2 

The  validity  of  the  distinction  as  expressed  by  the 
court  may  readily  be  granted,  as  may  also  the  correct- 

2  Ibid.,  p.  22. 


1  Ibid.,  p.  20. 


122  SOCIAL  REFORM  AND  THE  CONSTITUTION 


ness  of  the  decision  of  the  case  at  bar.  What  should 
be  particularly  noted,  however,  is  the  limited  con¬ 
stitutional  application  of  the  distinction.  As  the 
above  quotation  shows,  the  decision  rested  not  simply 
upon  the  distinction  between  manufacturing  and 
commerce,  but  upon  the  fact  that  there  was  no  basis 
for  determining  whether  liquors  manufactured  in 
the  state  were  to  pass  in  interstate  and  foreign  com¬ 
merce.  This  consideration  would  serve  by  itself  to 
distinguish  Kidd  v.  Pearson  from  any  case  which 
might  involve  the  validity  of  legislation  conferring 
the  power  of  manufacturing  for  the  sake  of  passing 
the  product  into  interstate  and  foreign  commerce. 
In  such  a  case  the  intent  of  the  producer  would  be 
determined  by  the  power  granted.  Ex  hypothesi ,  no 
authority  would  be  given  to  manufacture  products 
to  be  used  in  intrastate  commerce.  If  a  state  should 
choose  to  give  this  additional  power  to  a  federal  cor¬ 
poration,  that  would  be  the  affair  of  the  state  itself. 

That  a  definite  federal  grant  of  the  kind  under  dis¬ 
cussion,  and  an  inquiry  regarding  the  constitutionality 
of  such  a  grant  would  involve  considerations  quite 
other  than  those  which  determined  the  decision  in 
Kidd  v.  Pearson,  will  become  evident  if  we  consider 
the  question  from  another  point  of  view.  In  the  case 
of  Kidd  v.  Pearson,  a  contrary  decision  would  have 
denied  to  the  state  a  power  to  control  manufacture 
incidental  to  intrastate  commerce  because  of  the 
alleged  effect  of  the  prohibition  upon  interstate  com¬ 
merce.  This  would  have  been  unreasonable.  It 
would  have  established,  in  effect,  the  right  to  manu¬ 
facture,  for  the  purpose  of  using  in  intrastate  com¬ 
merce  the  articles  manufactured,  without  the  corre- 


FEDERAL  INCORPORATION 


123 


sponding  obligation  of  subjection  to  police  control. 
But,  aside  from  the  difficulty  of  determining  the  in¬ 
tention  of  the  producer,  it  may  reasonably  be  asserted 
that  the  fact  that  manufacturing  is  not  per  se  com¬ 
merce  apparently  gives  to  the  state,  in  the  absence  of 
federal  legislation  based  on  the  relation  between  manu¬ 
facturing  and  commerce,  a  plenary  police  power  over 
manufacturing,  whatever  may  be  the  intent  of  the 
producer  as  to  the  disposition  of  his  product. 

The  case  of  the  United  States  v.  E.  C.  Knight  Com¬ 
pany  1  adds  nothing  in  principle  to  that  of  Kidd  v. 
Pearson.  In  the  Knight  case  the  principles  of  the 
distinction  between  manufacturing  and  commerce 
are  elaborated  upon  the  same  basis  as  in  the  case  of 
Kidd  v.  Pearson,  which  is  cited  at  some  length,  and 
the  conclusion  is  reached  that  a  monopoly  of  manu¬ 
facture  is  not  per  se  a  monopoly  of  commerce.  The 
chief  distinguishing  feature  in  the  Knight  case  is  that 
the  law  under  consideration  was  a  federal  law.  But 
the  application  of  the  Knight  case  is  very  limited, 
since  the  decision  rested,  in  large  part  at  least,  on  the 
fact  that  the  pleadings  failed  to  show  that  the  monop¬ 
oly  in  manufacture  had  as  its  purpose  or  necessary 
result  a  monopoly  of  interstate  commerce.  It  is 
accordingly  not  possible  to  say  that,  had  the  plead¬ 
ings  shown  this,  the  monopoly  of  manufacturing 
would  not  have  been  held  to  work  a  restraint  of 
trade  in  violation  of  the  Sherman  Act. 

There  is,  indeed,  an  important  series  of  more  recent 
cases  which  support  the  position  that,  if  a  scheme 
of  action,  when  taken  as  a  whole,  is  predominantly 
directed  toward  interstate  commerce,  the  component 

1 156  U.  S.  1. 


124  SOCIAL  REFORM  AND  THE  CONSTITUTION 


parts  of  the  scheme  fall  under  Congressional  control, 
and  that  manufacturing  may  be  such  a  component 
part. 

In  the  case  of  Swift  and  Company  v.  United  States 1 
the  admissibility  of  an  incidental  federal  control  over 
intrastate  commerce  was  at  issue.  The  court  treats 
the  matter  as  follows :  — 

“Although  the  combination  alleged  embraces  restraint  and 
monopoly  of  trade  within  a  single  state,  its  effect  upon  commerce 
among  the  states  is  not  accidental,  secondary,  remote,  or  merely 
probable.  On  the  allegations  of  the  bill,  the  latter  commerce 
no  less,  perhaps  even  more,  than  commerce  within  a  single  state, 
is  an  object  of  attack.  .  .  .  Moreover  it  is  a  direct  object,  it 
is  that  for  the  sake  of  which  the  several  specific  acts  and  courses 
of  conduct  are  done  and  adopted.  Therefore  the  case  is  not 
like  U.  S.  v.  E.  C.  Knight  Co.,  156  U.  S.  1,  where  the  subject 
matter  of  the  combination  was  manufacture  and  the  direct 
object  monopoly  of  manufacture  within  a  state.  However  likely 
monopoly  of  commerce  among  the  states  in  the  articles  manu¬ 
factured  was  to  follow  from  the  agreement,  it  was  not  a  necessary 
consequence  nor  a  primary  end.  .  .  .  The  two  cases  are  near 
to  each  other  .  .  .  but  the  line  between  them  is  distinct.” 2 

The  case  of  Montague  v.  Lowry 3  goes  a  step  farther 
than  the  Swift  case;  for  the  combination  under  con¬ 
sideration  was  a  combination  between  dealers  and 
manufacturers,  and  not  between  dealers  alone.  The 
court  held  that  — 

“the  whole  thing  is  so  bound  together  that  when  looked  at  as 
a  whole  the  sale  of  unset  tiles  ceases  to  be  a  mere  transaction  in 
the  state  of  California,  and  becomes  part  of  a  purpose  which, 
when  carried  out,  amounts  to  and  is  a  contract  or  combination  in 
restraint  of  interstate  trade  or  commerce.”  4 


1  196  U.  S.  375. 

2  Ibid.,  p.  396. 


3  193  U.  S.  38. 

4  193  U.  S.  46. 


FEDERAL  INCORPORATION 


125 


The  same  doctrine  is  applied  in  Loewe  v.  Lawler 1  — 
the  Danbury  Hatters  case  —  and  in  this  case  the  right, 
under  certain  conditions,  of  direct  federal  control  over 
manufactures  appears  to  be  affirmed.  The  court 
indicates  the  nature  of  the  case  by  the  following 
quotation  from  the  allegations  :  — 

“We  repeat  that  the  complaint  averred  that  plaintiffs  were 
manufacturers  of  hats  in  Danbury,  Connecticut,  having  a 
factory  there,  and  were  then  and  there  engaged  in  an  interstate 
trade  in  some  twenty  states  other  than  the  state  of  Connecticut 
that  they  were  practically  dependent  upon  such  interstate  trade 
to  consume  the  product  of  their  factory,  only  a  small  percentage 
of  their  entire  output  being  consumed  in  the  state  of  Connecticut; 
that  at  the  time  the  alleged  combination  was  formed  they  were 
in  the  process  of  manufacturing  a  large  number  of  hats  for 
the  purpose  of  filling  engagements  then  actually  made  with 
consignees  and  wholesale  dealers  in  states  other  than  Connecti¬ 
cut  ;  and  that,  if  prevented  from  carrying  on  the  work  of  manu¬ 
facturing  these  hats,  they  would  be  unable  to  complete  these 
engagements.” 2 

It  is  further  shown  how  a  labor  combination,  the 
members  of  which  resided  “in  all  the  places  where  the 
wholesale  dealers  in  hats  and  their  customers  resided 
and  did  business,”  sought  to  compel  plaintiffs  to 
unionize  their  factory,  as  part  of  a  purpose  to  force 
“all  manufacturers  of  fur  hats  in  the  United  States” 
to  do  the  same.  Upon  plaintiffs’  refusal,  a  boycott 
was  declared  against  them  and  was  extended  to  their 
customers  and,  eventually,  to  the  customers  of  the^ 
latter.  It  was  not  confined  to  the  state  of  Connecti¬ 
cut,  but  covered  as  well  the  interstate  trade  of  the 
plaintiffs.  Among  the  means  of  coercion  to  be  em¬ 
ployed  was  the  causing,  by  threats  and  coercion  “and 

2  Ibid.,  p.  304. 


1  208  U.  S.  274. 


126  SOCIAL  REFORM  AND  THE  CONSTITUTION 


without  warning  or  information  to  the  plaintiffs, 
the  concerted  and  simultaneous  withdrawal  of  all 
the  makers  and  finishers  of  hats  then  working  for 
them,,,  both  union  and  nonunion.  The  design  was 
“  thereby  [to]  cripple  the  operations  of  the  plaintiffs’ 
factory  and  prevent  the  plaintiffs  from  filling  a  large 
number  of  orders  then  on  hand  from  such  wholesale 
dealers  in  states  other  than  Connecticut.”  The  court 
regarded  these  averments  as  indicative  of  the  existence 
of  a  direct  purpose  of  destroying  plaintiffs’  interstate 
trade,  not  merely  of  preventing  them  “from  manu¬ 
facturing  articles  then  and  there  intended  for  trans¬ 
portation  beyond  the  state,”  but  also  preventing 
“the  vendees  from  reselling  the  hats  which  they  had 
imported  from  Connecticut  or  from  further  negotiat¬ 
ing  with  plaintiffs  for  the  purchase  and  intertrans¬ 
portation  of  such  hats  from  Connecticut  to  the  various 
places  of  destination.”  1  The  court  accordingly  held 
that  — 

“although  some  of  the  means  whereby  the  interstate  traffic 
was  to  be  destroyed  were  acts  within  a  state,  and  some  of  them 
were  in  themselves  as  a  part  of  their  obvious  purpose  and  effect 
beyond  the  scope  of  federal  authority,  still  .  .  .  the  acts  must 
be  considered  as  a  whole,  and  the  plan  is  open  to  condemnation, 
notwithstanding  a  negligible  amount  of  intrastate  business  might 
be  affected  in  carrying  it  out.  If  the  purposes  of  the  combina¬ 
tions  were,  as  alleged,  to  prevent  any  interstate  transportation 
at  all,  the  fact  that  the  means  operated  at  one  end  before  physical 
transportation  commenced  and  at  the  other  after  physical  trans¬ 
portation  ended  was  immaterial. 

The  Knight  case  is  distinguished  upon  the  ground  that 
there  “the  object  and  intention  of  the  combination 
determined  its  legality.”  2  This  view  of  the  Knight 
1  208  U.  S.  p.  300.  2  Ibid.,  p.  297. 


FEDERAL  INCORPORATION 


127 


case,  especially  when  coupled  with  the  defectiveness 
of  the  pleadings  therein,  goes  far  to  support  the  opinion 
expressed  above  regarding  that  case. 

The  Danbury  Hatters  case  is  worthy  of  more  care¬ 
ful  examination  than  can  here  be  devoted  to  it.  For 
our  purposes  it  is  sufficient  to  point  out  that  the  case 
shows  conclusively  that  a  necessary  relation  may  exist 
between  manufacturing  and  interstate  trade,  and  that 
such  a  relation  may  form  a  legitimate  basis  for  federal 
action  with  regard  to  manufacturing.  To  justify 
federal  legislation  conferring  upon  federal  interstate 
commerce  corporations  the  power  to  manufacture 
articles  to  be  passed  into  the  channels  of  interstate 
trade,  it  is  necessary  only  to  show  that  the  bestowal 
of  such  a  power  will  make  them  more  efficient  organs 
for  the  working  out  of  the  national  regulation  of  inter¬ 
state  commerce.  The  most  strictly  limited  interpreta¬ 
tion  which  it  is  possible  to  give  to  the  principles  gov¬ 
erning  the  decision  in  this  case  will  afford  judicial 
precedent  for  the  recognition  of  this  degree  of  connec¬ 
tion  between  manufacturing  and  commerce. 

Special  attention  should  be  called  to  a  few  of  the 
facts  in  this  case.  (1)  The  ultimate  purpose  of  the 
labor  combination  related  to  conditions  of  manu¬ 
facturing,  not  to  the  conditions  under  which  interstate 
trade,  in  and  of  itself,  was  to  be  carried  on.  The 
decision  therefore  establishes  the  principle  that  any 
substantial  relation  between  acts  and  purposes  on  the 
one  hand  and  the  carrying  on  of  interstate  commerce 
on  the  other  justifies  federal  control  with  regard 
to  such  acts  and  purposes,  and  that  such  a  re¬ 
lation  exists  where  such  acts  and  purposes  affect 
interstate  commerce  only  by  the  results  which  neces- 


128  SOCIAL  REFORM  AND  THE  CONSTITUTION 


sarily  attend  the  carrying  out  of  the  purposes.  (2) 
Since  the  decision  is  based  upon  the  purpose  and  effect 
of  the  scheme  as  a  whole,  and  since  it  is  held  to  be 
immaterial  that  some  of  the  acts  alleged  were  done 
either  before  or  after  physical  transportation,  it  must 
logically  follow  that,  given  the  purpose  of  restraining 
interstate  trade,  even  if  the  acts  done  for  the  sake 
of  that  end  had  related  simply  to  the  prevention  of 
manufacture,  with  the  necessary  result,  however,  of 
preventing  shipment,  all  the  essential  elements  of 
the  scheme  would  have  been  present  and  the  decision 
must  have  been  the  same.  (3)  Finally,  the  existence 
of  orders  for  goods  to  be  transshipped  in  interstate 
commerce  furnishes  an  answer,  with  regard  at  least 
to  federal  control  over  acts  by  private  parties  which 
would  prevent  manufacture  of  goods  to  be  used  in 
filling  such  orders,  to  the  objection  largely  controlling 
in  Kidd  v.  Pearson  and  the  Knight  case,  i.e.  the  un¬ 
certain  intent  of  the  producer. 

The  conclusions  reached  from  the  foregoing  ex¬ 
amination  of  the  leading  cases  dealing  with  the  re¬ 
lationship  between  manufacturing  and  interstate  trade 
may  be  recapitulated  as  follows :  (1)  Manufacturing 
is  not  per  se  commerce.  (2)  Manufacturing  may, 
nevertheless,  be  controlled  by  the  federal  govern¬ 
ment  under  the  commerce  power,  in  so  far  as  in  any 
given  case  of  the  exercise  of  such  control  a  necessary 
relation  between  manufacturing  and  commerce  can 
be  shown  to  exist.  (3)  The  variable  and  uncertain 
intent  of  the  producer  is  a  bar  to  federal  control  and 
a  justification  of  state  control,  even  though  such  state 
control  may  have  an  actual  and  important  effect  upon 
interstate  trade.  (4)  Under  some  circumstances  a 


FEDERAL  INCORPORATION 


129 


necessary  connection  between  manufacturing  and 
interstate  trade  may  remove  this  uncertainty  as  to  the 
intent  of  the  producer.  Under  such  circumstances 
manufacturing,  or  any  interference  therewith,  is  rec¬ 
ognized  as  being  part  of  a  scheme  which,  when  taken 
as  a  whole,  relates  to  interstate  commerce  and  falls 
under  the  regulating  authority  of  federal  government. 

If  the  foregoing  analysis  is  correct,  it  is  clear  that 
there  are  no  judicial  precedents  which  can  be  invoked 
to  deny  to  the  federal  government  the  right  to  confer, 
upon  any  corporations  which  it  may  erect  and  to 
which  it  may  give  the  power  to  carry  on  an  interstate 
trade,  the  further  power  to  manufacture  articles  to 
be  transshipped  into  such  trade.  The  great  bar  to 
federal  control  over  manufacturing  —  the  uncertain 
intent  of  the  producer  as  to  the  interstate  or  intra¬ 
state  disposition  of  the  articles  manufactured  —  will 
clearly  not  exist  where  the  power  to  manufacture  is 
thus  limited  by  the  very  terms  in  which  it  is  bestowed. 
This  being  true,  it  remains  only  to  show  that  the  con¬ 
ferring  of  such  a  power  to  manufacture  would  have  the 
effect  of  better  fitting  federal  interstate  commerce 
corporations  to  fulfill  the  ends  for  which  the  federal 
government  may  create  them.  This  can  be  done  by 
showing  the  existence  of  a  real  relation  between  manu¬ 
facturing  and  commerce.  The  Danbury  Hatters  case 
has  already  been  considered  and  found  to  support  the 
view  that  such  a  relation  actually  exists.  Some 
further  consideration  will  tend  to  put  the  argument 
beyond  the  possibility  of  reasonable  question. 

It  should  first  be  noted  that,  in  order  to  justify  the 
conferring  of  a  given  power  upon  federal  corporations 
or  licensees,  the  relation  between  manufacturing  and 


130  SOCIAL  REFORM  AND  THE  CONSTITUTION 


interstate  commerce  need  not  be  so  close  as  it  must 
be  in  order  to  justify  a  general  federal  control  over 
the  matter  in  question.  For  example,  the  relation  of 
ordinary  banking  operations  to  the  purposes  for  which 
the  federal  government  incorporates  national  banks 
justifies  the  conferring  upon  these  banks  of  the  power  to 
carry  on  all  such  operations.  But  the  federal  govern¬ 
ment  cannot  control  these  operations  as  carried  on 
by  state  banks.  In  the  case  of  powers  conferred  upon 
federal  corporations,  this  distinction  depends  largely 
upon  the  existence  or  the  elimination  of  uncertainty 
as  to  the  necessity  of  the  relation  between  the  power 
conferred  and  the  legitimate  ends  of  the  federal  gov¬ 
ernment.  It  is  largely  a  matter  of  making  the  exer¬ 
cise  of  such  powers  part  of  a  scheme  over  which,  when 
it  is  taken  as  a  whole,  the  government  has  indubitable 
authority. 

It  is  evident  that  the  connection  between  manu¬ 
facturing  and  interstate  commerce  is  a  necessary  rela¬ 
tion  in  the  sense  that  the  conditions  under  which 
manufacturing  is  carried  on  profoundly  affect  inter¬ 
state  commerce.  Consider,  in  the  first  place,  the 
effects  of  the  power  of  the  states  over  “foreign”  cor¬ 
porations.  It  is  well  settled  that  it  is  wholly  within 
the  discretion  of  a  state  to  admit  or  exclude  a  corpora¬ 
tion  created  by  another  state.  Subject  to  the  federal 
guaranty  of  the  obligation  of  contracts  and,  it  would 
seem,  to  the  provisions  of  the  fourteenth  amendment, 
a  state  has  also  the  power  to  exclude  such  corpora¬ 
tions  after  they  have  been  admitted.  In  the  case  of 
the  Hammond  Packing  Company  v.  Arkansas,1  it  was 
held  that  an  allegation  as  to  the  motive  for  the  exclu- 

1  212  U.  S.  322. 


FEDERAL  INCORPORATION 


I3I 

sicn,  even  though  such  motive  may  arise  from  acts 
done  by  the  corporation  outside  of  the  jurisdiction  of 
the  state,  need  not  be  considered  by  the  court.  The 
court  said :  — 

“If  the  premise  of  the  asserted  proposition  be  that,  even 
though  the  statute  addressed  itself  exclusively  to  the  doing  of 
business  within  the  state  under  the  circumstances  stated,  it 
nevertheless  exerted  an  extraterritorial  power,  because  it  re¬ 
strained  the  continuance  of  business  within  the  state  by  a  cor¬ 
poration  which  had  done  the  designated  acts  outside  the  state, 
we  think  the  proposition  without  merit.  As  the  state  possesses 
the  plenary  power  to  exclude  a  foreign  corporation  from  doing 
business  within  its  borders,  it  follows  that,  if  the  state  exerted 
such  unquestioned  power  from  a  consideration  of  acts  done  in 
another  jurisdiction,  the  motive  for  the  exertion  of  the  lawful 
power  did  not  operate  to  call  the  power  into  play.  This  being 
true,  it  follows  that,  as  the  power  of  the  state  to  prevent  a  foreign 
corporation  from  continuing  to  do  business  is  but  the  correlative 
of  its  authority  to  prevent  such  corporation  from  coming  into  the 
state,  unless  by  the  act  of  admission  some  contract  right  in  favor 
of  the  corporation  arose  .  .  .  the  prohibition  against  continuing 
to  do  business  in  the  state  because  of  acts  done  beyond  the  state 
was  none  the  less  a  valid  exertion  of  power  as  to  a  subject  within 
the  jurisdiction  of  the  state.  .  .  .  The  power,  and  not  the 
motive,  is  the  test  to  be  resorted  to  for  the  purpose  of  determin¬ 
ing  the  constitutionality  of  the  legislative  action.”  1 

It  is  evident  that  a  state  may  thus  interfere 
very  radically  with  the  operations  of  companies  not 
federally  incorporated.  It  is  also  clear  that  federal 
incorporation  without  grant  of  the  power  to  manufac¬ 
ture  would  still  leave  corporations  largely  at  the 
mercy  of  the  states.  In  order  to  carry  on  manufac¬ 
turing,  they  would  require  state  charters  or  state 
grants  of  privilege;  and  even  though  the  state  and 


1  Ibid.,  p.  342. 


132  SOCIAL  REFORM  AND  THE  CONSTITUTION 


federal  corporations  were  absolutely  separate  in  organi¬ 
zation,  it  is  clear  that  the  state  power  over  corpora¬ 
tions  admitted  or  created  by  its  authority  could  be 
used  to  superadd  regulations  which  might,  in  terms 
or  in  effect,  control  the  purely  trading  operations  of 
the  federal  corporation.  Federal  control  over  manu¬ 
facturing  is  essential  to  independent  and  efficient 
federal  control  over  purely  trading  operations. 

This,  however,  is  but  one  illustration  of  the  legal 
interdependence  of  manufacturing  and  commerce. 
The  legal  relation  between  these  matters  is  inevitable 
because  of  the  economic  relation,  which  is  simply  that 
of  means  to  end.  The  existence  and  application  of 
this  relation  is  a  commonplace  in  the  legislative  his¬ 
tory  of  every  commercial  power.  Upon  it  is  based 
the  almost  universal  system  of  protective  tariffs. 
The  relation  also  appears  in  the  fact  that  one  of  the 
most  important  considerations  regarding  the  advis¬ 
ability  of  various  forms  of  labor  legislation  is  always 
the  probable  effect  upon  foreign  commerce,  and,  in 
state  legislation,  upon  interstate  commerce,  of  the  in¬ 
creased  cost  of  production  which  regularly  follows 
every  attempt  to  improve  the  position  of  the  laborers. 
At  a  time  when  the  United  States  is  developing  its 
export  trade  with  unexampled  rapidity,  the  necessity 
of  subjecting  the  manufacture  of  the  goods  which  are 
to  pass  in  that  trade  to  a  federal  —  and  exclusively 
federal  —  control  is  too  obvious  to  require  discussion. 
And  the  same  necessity  applies  to  the  manufacture  of 
goods  which  are  to  pass  in  interstate  commerce.  The 
whole  business  of  manufacturing  is  carried  on  with  a 
view  to,  and  its  success  is  dependent  upon,  the  secur¬ 
ing  of  a  low  production  cost  in  order  to  compete  sue- 


FEDERAL  INCORPORATION 


133 


cessfully  in  the  disposal  of  the  goods  produced.  If 
legislative  control  over  manufacturing  carried  on  for 
the  sake  of  interstate  and  foreign  commerce  be  allowed 
to  remain  with  the  states,  the  development  of  these 
forms  of  commerce  will  be  most  seriously  hampered. 
Not  only  will  the  development  of  our  export  trade  be 
imperiled,  but  fair  and  equal  disposition  through  the 
channels  of  interstate  trade  of  articles  manufactured 
in  different  states  will  be  impossible.  On  the  other 
hand,  in  proportion  to  the  influence  which  the  fore¬ 
going  considerations,  especially  the  necessity  of  a  low 
production  cost,  exercise  upon  the  minds  of  our  state 
legislators,  regulations,  in  the  nature  of  labor  and 
other  legislation,  which  might  control  manufacturing 
in  such  a  way  as  effectively  to  promote  the  public 
welfare,  will  be  in  a  large  measure  defeated,  because 
each  state  will  be  apprehensive  that  its  manufacturers 
may  be  placed  at  a  serious  disadvantage  in  the  dis¬ 
position  of  the  goods  produced.  Manufacturing  and 
trading  operations  are  so  inextricably  blended  that 
the  one  can  be  effectively  regulated  only  by  the  au¬ 
thority  which  controls  the  regulation  of  the  other. 
If  the  interrelations  between  the  two  do  not  constitute 
a  “ necessary  relation,”  it  is  difficult  to  conceive  in 
what  a  necessary  relation  would  consist. 

It  may  then  be  said  that  the  power  of  Congress  to 
confer  upon  federal  interstate  commerce  corporations 
the  right  to  manufacture  goods  to  be  passed  in  inter¬ 
state  or  foreign  commerce  amply  meets  Marshall’s 
test,  as  he  developed  it  in  connection  with  the  grant¬ 
ing  to  the  National  Bank  of  the  power  to  do  a  private 
banking  business.  The  grant  of  the  power  to  manu¬ 
facture  is  essential  in  order  to  make  these  corporations 


134  SOCIAL  REFORM  AND  THE  CONSTITUTION 


fit  instruments  for  the  carrying  out  of  federal  purposes 
relative  to  the  regulation  of  interstate  commerce. 
The  purpose  of  Congress  in  granting  this  power  would 
be  a  public  purpose  and  would  have  a  reasonable 
relation  to  the  control  of  interstate  and  foreign 
commerce. 

Many  of  the  arguments  advanced  against  the  recog¬ 
nition  of  the  power  which  is  here  claimed  to  reside  in 
the  federal  government  are  doubtless  inspired  by  a 
feeling  of  apprehension,  evoked  by  the  remarkable 
expansion  of  federal  authority  which  has  already  been 
occasioned  by  changing  industrial  conditions.  But, 
as  has  been  pointed  out  above  and  supported  by  quo¬ 
tations  from  the  opinions  of  the  Supreme  Court,  con¬ 
stitutional  principles  must,  in  order  to  preserve  their 
real  meaning,  necessarily  have  different  applications 
to  various  concrete  situations.  The  principles  govern¬ 
ing  the  problem  discussed  in  this  chapter  have  always 
been  the  same,  and  no  situation  has  ever  existed  in 
which  federal  interstate  commerce  corporations,  with 
the  powers  relative  to  manufacturing  outlined  above, 
could  not  have  been  constitutionally  created.  That 
under  present  industrial  conditions  such  corporations 
would  in  their  operations  occupy  a  very  extensive 
portion  of  the  commercial  and  industrial  field  can  in 
no  wise  offer  a  ground  of  legitimate  argument  against 
their  constitutionality. 

Before  closing  this  part  of  the  discussion,  it  may  be 
well  to  revert  to  a  point  already  noticed  in  connection 
with  Marshall’s  opinion  in  Osborn  v.  The  Bank,  viz. 
the  possible  contention  that  every  federal  corporation 
must  be  an  “agent”  of  the  government  or  have  a 
strictly  “political”  connection  therewith.  It  is  hoped 


FEDERAL  INCORPORATION 


135 


that  the  considerations  previously  advanced  made  it 
apparent  that  either  these  relations  were  not  at  all 
essential  or  else  the  words  “ agent”  and  “political” 
must  be  interpreted  in  so  broad  a  sense  as  to  mean 
simply  “having  utility  for  a  public  and  properly 
national  purpose.”  But  upon  the  basis  of  the  argu¬ 
ment  as  developed  in  the  later  parts  of  this  chapter,  it 
is  believed  that  it  can  be  safely  asserted  that,  granting 
the  existence  of  such  limitations  upon  the  federal 
power  of  incorporation,  incorporation  for  the  purposes 
and  with  the  grant  of  the  powers  above  contended  for 
could  still  be  justified. 

If  the  argument  be  based  upon  the  word  “agency,” 
and  if  agency  be  understood  to  mean  the  performance 
of  a  function  which  the  government  itself  could  con¬ 
stitutionally  undertake,  it  is  hard  to  see  why  the 
government  itself  could  not  constitutionally  carry  on 
interstate  commerce  and  manufacture  goods  to  be 
used  in  such  commerce.  If  the  government  could  do 
this,  however  undesirable  such  governmental  action 
might  be,  it  is  evident  that  corporations  erected  for 
that  purpose  would  necessarily  be  governmental  agents, 
even  in  this  restricted  interpretation  of  the  term. 
And  since  regulation  involves  a  choice  of  means,  the 
burden  of  proof  is  with  those  who  would  deny  this 
power  to  the  government. 

Again,  if  the  argument  be  based  upon  the  word 
“political,”  and  if  a  political  connection  be,  for  the 
purposes  of  argument,  understood  to  be  a  connection 
relative  to  a  peculiarly  governmental  function,  where 
shall  we  draw  the  line  which  will  include  banking  and 
transportation  and  exclude  trading  operations?  In 
the  present  stage  of  industrial  and  commercial  develop- 


136  SOCIAL  REFORM  AND  THE  CONSTITUTION 


merit,  is  it  possible  to  assert  that  a  corporation  which 
should  furnish  a  medium  for  efficient  governmental 
control  over  matters  the  regulation  of  which  is  so 
essential  to  the  general  welfare  would  not  have  this 
peculiarly  political  connection  with  the  government? 
These  considerations  are,  however,  introduced  merely 
for  the  sake  of  argument.  That  federal  incorporation 
is  not  at  all  subject  to  any  such  tests  has,  as  it  is 
hoped,  been  sufficiently  established  in  the  preceding 
discussion. 

It  will  be  impossible  in  this  chapter  to  treat  at  all 
fully  the  powers  which  may  be  constitutionally  con¬ 
ferred  upon  such  federal  corporations  and  the  cor¬ 
relative  exemptions  from  state  control.  The  general 
principle  is  plain  enough,  and  has  already  been  de¬ 
veloped  in  connection  with  the  subject  of  manufac¬ 
turing.  Any  power  which  will  fit  the  corporation  to 
perform  more  effectively  the  work  for  the  sake  of 
which  it  is  created  may  properly  be  conferred,  in  the 
absence  of  any  direct  constitutional  prohibition, 
and  the  exercise  of  such  powers  cannot  in  any  way  be 
interfered  with  or  controlled  by  a  state.  Further¬ 
more,  as  an  incident  to  the  right  of  Congress  to  a 
choice  of  means,  Congressional  judgment,  if  at  all 
reasonable,  as  to  the  necessity  of  any  particular  power 
will  be  conclusive  upon  the  court.  These  principles, 
it  will  be  recalled,  are  elaborated  in  Marshall’s  opin¬ 
ions  in  the  United  States  Bank  cases.1 

Exclusive  jurisdiction  over  suits  to  which  a  federal 
corporation  is  a  party  may  be  vested  in  the  federal 
courts.  It  was  held  in  Osborn  v.  The  Bank 2  that 
federal  corporations  may  be  authorized  to  sue  in  the 
1  Cf.  supra,  pp.  103-113.  2  9  Wheaton,  738. 


FEDERAL  INCORPORATION 


*37 


federal  courts,  since  every  act  of  a  federal  corporation 
grows  out  of  a  law  of  the  United  States.  The  Pacific 
Removal  cases  1  held  that  it  may  be  provided  that  a 
federal  corporation  shall  be  sued  in  the  federal  courts, 
and,  accordingly,  that  such  a  corporation  may  — 
the  privilege  being  deducible  from  its  charter  —  cause 
any  suit  against  it  to  be  removed  into  the  federal 
courts.  It  follows  that  the  federal  courts  may  be 
made  the  sole  tribunals  for  the  decision  of  cases  rela¬ 
tive  to  federal  corporations,  and  the  fact  that  various 
matters  not  dependent  upon  the  construction  of  fed¬ 
eral  law  may  be  involved,  is  immaterial. 

A  few  illustrations  of  the  extent  of  the  powers  and 
exemptions  from  state  control  which  may  be  granted 
to  federal  corporations  may  be  useful.  The  case  of 
Easton  v.  Iowa  2  is  particularly  instructive.  It  was 
held  in  this  case  that  a  state  statute  designed  to  pre¬ 
vent  fraud  cannot  apply  to  a  national  bank.  And  it 
should  be  remembered  that  this  power  of  legislation 
for  the  prevention  of  fraud  is  one  of  the  most  far- 
reaching  of  state  powers.  The  following  quotation 
shows  very  clearly  the  viewpoint  of  the  court :  — 

“Our  conclusions,  upon  principle  and  authority,  are  that 
Congress,  having  power  to  create  a  system  of  national  banks, 
is  the  judge  as  to  the  extent  of  the  powers  which  should  be  con¬ 
ferred  upon  such  banks,  and  has  the  sole  power  to  regulate  and 
control  their  operations  .  .  .  ;  that  it  is  not  competent  for  state 
legislatures  to  interfere,  whether  with  hostile  or  friendly  inten¬ 
tions,  with  national  banks  or  their  officers  in  the  exercise  of  the 
powers  bestowed  upon  them  by  the  general  government.” 3 


These  principles  apply  with  equal  force  to  the  powers 
granted  to  any  federal  corporation  or  bestowed  upon 


1  ns  XL  S.  i. 


3  Ibid.,  p.  238. 


2  188  U.  S.  220. 


138  SOCIAL  REFORM  AND  THE  CONSTITUTION 


any  individual  by  the  federal  government  in  the  exer¬ 
cise  of  its  constitutional  authority. 

Citations  regarding  the  exemption  of  federal  cor¬ 
porations  from  state  control  might  be  multiplied  in¬ 
definitely.  Marshall  sets  forth  the  principle  very 
clearly  in  the  case  of  Weston  v.  Charleston.1  Two 
quotations  from  that  opinion  will  reveal  its  force. 

“  The  sovereignty  of  a  state  extends  to  everything  which  exists 
by  its  own  authority,  or  is  introduced  by  its  permission;  but 
not  to  those  means  which  are  employed  by  Congress  to  carry 
into  execution  powers  conferred  upon  that  body  by  the  people 
of  the  United  States.  .  .  .  The  states  have  no  power  by  taxation 
or  otherwise  to  retard,  impede,  burden,  or  in  any  manner  control 
the  operation  of  the  constitutional  laws  enacted  by  Congress  to 
carry  into  execution  the  powers  vested  in  the  “  general  govern¬ 
ment.”  2 

The  same  principles  are  set  forth  in  Davis  v.  Elmira 
Savings  Bank,3  where  a  New  York  statute  regarding 
the  distribution  of  the  assets  of  insolvent  banks  con¬ 
flicted  with  congressional  legislation  regarding  national 
banks.  The  court  said  :  — 

“National  banks  are  instrumentalities  of  the  federal  govern¬ 
ment,  created  for  a  public  purpose,  and  as  such  necessarily  sub¬ 
ject  to  the  paramount  authority  of  the  United  States.  It 
follows  that  an  attempt,  by  a  state,  to  define  their  duties  or  con¬ 
trol  the  conduct  of  their  affairs  is  absolutely  void,  wherever 
such  attempted  exercise  of  authority  expressly  conflicts  with  the 
laws  of  the  United  States,  and  either  frustrates  the  purpose  of 
the  national  legislation  or  impairs  the  efficiency  of  these  agencies 
of  the  federal  government  to  discharge  the  duties,  for  the  per¬ 
formance  of  which  they  were  created.  These  principles  are 
axiomatic,  and  are  sanctioned  by  the  repeated  adjudications  of 
this  court.” 

1  2  Peters,  449. 

2  Ibid.,  p.  466.  Marshall  is  quoting  from  his  opinion  in  McCulloch 

v.  Maryland.  3  161  U.  S.  275. 


FEDERAL  INCORPORATION 


139 


Cases  regarding  the  acts  of  officers  of  the  United 
States  done  in  the  performance  of  their  duties  are  in 
point,  since  their  exemption  from  state  control  rests 
upon  the  same  principle.  Among  these  cases  may  be 
cited  Tarble’s  case,1  Tennessee  v.  Davis,2  In  re  Neagle,3 
and  Ex  parte  Siebold.4  Although  there  may  be  a 
certain  distinction  between  the  acts  of  federal  officers 
and  federal  corporations,  —  a  distinction  which  would 
apparently  find  application  with  regard  to  the  grant¬ 
ing  of  writs  of  habeas  corpus ,  —  the  principle  of  the 
supremacy  of  federal  law  is  the  same  in  both  classes  of 
cases. 

That  the  federal  government  may  determine  private- 
legal  relations  with  regard  to  matters  within  its  juris¬ 
diction  is  also  illustrated  by  the  case  of  Lord  v.  Steam¬ 
ship  Company.5  This  decision,  based  upon  the  com¬ 
merce  power,  upholds  a  federal  law  limiting  the 
liability  of  carriers  by  water.  The  carriage  in  ques¬ 
tion  was  upon  the  high  seas,  but  entirely  between  ports 
and  places  in  the  same  state.6 

The  case  of  Ohio  v.  Thomas  7  is  particularly  instruc¬ 
tive  by  reason  of  the  apparent  unessentiality  of  the 
matter  over  which  federal  control  was  none  the  less 
affirmed.  The  governor  of  a  soldiers’  home,  located 
in  Ohio  and  upon  land  subject  to  the  jurisdiction  of 
that  state,  had  supplied  oleomargarine  to  the  inmates 
and  had  been  arrested  for  violation  of  an  Ohio  law. 
The  court  found  that  he  had  acted  under  authority 
of  federal  law;  it  consequently  upheld  the  action  of 

1  13  Wallace,  397.  2  100  U.  S.  257.  3  135  U.  S.  1. 

4  100  U.  S.  371.  5 102  U.  S.  541. 

6  Cf.  also  Employers’  Liability  cases,  207  U.  S.  463. 

7  173  U.  S.  276. 


140  SOCIAL  REFORM  AND  THE  CONSTITUTION 

the  circuit  court  in  granting  a  writ  of  habeas  corpus. 
The  particular  interest  of  the  case  lies  in  the  claim 
made  in  behalf  of  the  state  that  the  acts  done  by  the 
governor  were  properly  subject  to  state  law,  in  that 
they  were  “not  necessary  for  the  government  and 
management  of  the  home  for  the  purpose  for  which 
it  was  incorporated,  or  authorized  by  any  act  of  the 
United  States.”  But  the  court  held  that  the  act  was 
done  under  authority  of  the  United  States  and  was 
“therefore  legal,  any  act  of  the  state  to  the  contrary 
notwithstanding.”  It  would  appear,  accordingly, 
that  whatever  is  done  in  accordance  with  United 
States  authority  will,  to  an  extremely  wide  extent, 
be  accepted  by  the  court  as  being  necessary  to  the 
carrying  out  of  the  purpose  of  federal  incorporation. 
The  giving  out  of  oleomargarine  as  a  ration  can 
hardly  be  regarded  as  a  matter  of  very  pressing  neces¬ 
sity.  It  must  then  follow  that  the  inherent  impor¬ 
tance  of  any  particular  action  is  immaterial ;  that  any 
and  every  detail  of  the  management  of  a  federal  cor¬ 
poration  may  be  regulated  by  the  federal  government, 
and  this  to  the  exclusion  of  state  control. 

It  is  therefore  needless  to  go  into  details  as  to 
powers  which  may  be  conferred  and  as  to  correlative 
exemptions  from  state  authority.1  Aside  from  any 
direct  constitutional  prohibitions,  the  discretion  of 
Congress  is  limited  solely  by  the  necessity  of  some 
reasonable  relation  between  the  powers  conferred  and 
the  better  fitting  of  the  corporation  for  carrying  out 

1  An  interesting  statement  of  what  the  court  conceives  that  Con¬ 
gress  may  do  with  propriety  in  the  case  of  national  banks  is  to  be 
found  in  Cook  County  National  Bank  v.  United  States,  107  U.  S.  445. 
But  Congress  has  never  in  the  organization  of  these  banks  occupied 
the  full  field  belonging  to  it. 


FEDERAL  INCORPORATION 


141 

the  public  purposes  for  which  it  is  established.  Just 
as  Congress,  to  recur  to  Hamilton’s  illustration,  could 
not  erect  a  corporation  for  superintending  the  police 
of  Philadelphia,  so  it  could  not  confer  that  power 
upon  a  corporation  previously  erected  for  a  proper 
purpose.  The  reason  for  this  is  not  that  the  power 
conferred  must  be  such  as  would  justify  the  erection 
of  a  corporation  for  the  sake  of  that  function  taken 
by  itself,  but  rather  that  the  superintendence  of  the 
Philadelphia  police  could  not  effectively  further  a 
proper  purpose  of  Congressional  action. 

This  limitation,  however,  must  be  rather  narrowly 
construed.  It  has  been  shown  above  that  things  ordi¬ 
narily  outside  federal  jurisdiction  may  be  included 
among  the  powers  granted  to  federal  corporations  or 
conferred  as  part  of  a  licensing  system  upon  indi¬ 
viduals.  It  has  also  been  shown  why  and  to  what 
extent  this  is  true :  it  is  true  in  so  far  as  such  matters 
form  constituent  parts  of  a  scheme  which,  taken  as  a 
whole  is  subject  to  federal  authority.  Among  the 
powers  which  may  be  conferred  upon  federal  inter¬ 
state  commerce  corporations  it  is  probably  safe  to 
include  that  of  doing  an  intrastate  business,  to  the 
extent  to  which  such  intrastate  business  forms  a 
necessary  part  of  the  interstate  business.  This  rela¬ 
tion  certainly  exists  in  the  case  of  local  telegraph 
business.1  It  may  also  be  well  to  note  particularly 
that  the  relations  between  employer  and  employee 
would  be  subject  to  exclusive  federal  jurisdiction. 

It  is  not  necessary  to  discuss  in  any  detail  the  cases 
in  which  state  laws  have  been  held  to  apply  to  national 
banks,  since  such  cases  always  rest  either  upon  express 

1  Cf.  Western  Union  Telegraph  Co.  v.  Kansas,  216  U,  S.  1,  37. 


142  SOCIAL  REFORM  AND  THE  CONSTITUTION 


permission  of  Congress  or  else  upon  failure  of  Con¬ 
gress  to  cover  the  subject  matter  either  directly  or  by 
implication.  In  Bank  v.  Commonwealth  1  there  is  to 
be  found  what  is  perhaps  the  strongest  statement  by 
the  Supreme  Court  of  the  authority  of  the  states. 
The  decision  rests  in  effect  upon  Congressional  per¬ 
mission;  but  the  opinion  contains  statements  which 
are  somewhat  ambiguous.  It  may  be  well  to  quote :  — 

“The  agencies  of  the  federal  government  are  only  exempted 
from  state  legislation,  so  far  as  that  legislation  may  interfere 
with  or  impair  their  efficiency  in  performing  the  functions  by 
which  they  are  designed  to  serve  that  government.  Any  other 
rule  would  convert  a  principle,  founded  alone  in  the  necessity  of 
securing  to  the  government  of  the  United  States  the  means  of 
exercising  its  legitimate  powers,  into  an  unauthorized  and  un¬ 
justifiable  invasion  of  the  rights  of  the  states.  The  salary  of  a 
federal  officer  may  not  be  taxed ;  he  may  be  exempted  from  any 
personal  service  which  interferes  with  the  discharge  of  his 
official  duties,  because  these  exemptions  are  essential  to  enable 
him  to  perform  those  duties.  But  he  is  subject  to  all  the  laws  of 
the  state  which  affect  his  family  or  social  relations,  or  his  prop¬ 
erty,  and  he  is  liable  to  punishment  for  crime,  though  that 
punishment  be  imprisonment  or  death.  So  of  the  banks.  They 
are  subject  to  the  laws  of  the  state,  and  are  governed  in  their 
daily  course  of  business  far  more  by  the  laws  of  the  state  than  of 
the  nation.  All  their  contracts  are  governed  and  construed  by 
state  laws.  Their  acquisition  and  transfer  of  property,  their 
right  to  collect  their  debts,  and  their  liability  to  be  sued  for  debts, 
are  all  based  on  state  law.  It  is  only  when  the  state  law  incapac¬ 
itates  the  banks  from  discharging  their  duties  to  the  government 
that  it  becomes  unconstitutional.” 2 

The  above  quotation  contains  suggestive  and  valu¬ 
able  examples  of  matters  which  may  be  regulated  by 
state  laws  in  the  absence  of  Congressional  action. 


1  9  Wallace,  353. 


2  Ibid.,  p.  362. 


FEDERAL  INCORPORATION 


I43 


The  decision  was  hardly  intended  to  go  —  and  it  cer¬ 
tainly  would  not  be  a  proper  interpretation  of  the 
constitution  if  it  actually  went  —  farther  than  this. 
The  very  nature  of  the  points  referred  to  demon¬ 
strates  this  conclusively.  For  instance,  it  would  be 
altogether  absurd  to  contend  that  the  utility  of  a 
national  bank  as  a  federal  instrumentality  might  not 
be  easily  impaired  if  the  right  of  the  bank  to  collect 
its  debts  could  not  be  constitutionally  provided  for 
and  controlled  by  the  federal  government.  Again, 
the  comparison  with  federal  officers  is  not  completely 
in  point,  since  a  federal  officer  has  a  dual  character, 
one  official,  one  private.  The  bank,  on  the  other 
hand,  since  it  neither  exists  by  the  authority  nor  is 
introduced  by  the  permission  of  the  state,  may,  if 
Congress  so  determines,  be  subjected  to  federal  con¬ 
trol  as  to  its  every  act,  as  exclusively  as  if  it  were  not 
physically  situated  within  the  state. 

The  last  question  which  remains  to  be  discussed  is 
that  of  the  right  of  the  federal  government  to  restrict 
the  conduct  of  interstate  commerce  under  the  corporate 
form  of  organization  to  corporations  either  of  its  own 
creation  or  else  admitted  by  it  to  such  commerce.  It 
must  be  held  that  the  federal  government  has  this 
right.  It  is  well  settled  that  the  power  of  the  federal 
government  over  interstate  commerce  is  plenary,  and 
thus  inclusive  of  the  right  to  exclude  from  such  com¬ 
merce,  provided  always  that  the  exclusion  is  not  arbi¬ 
trary.  The  matter  was  discussed  at  length  in  the 
Lottery  case,1  and  it  was  expressly  held  that  such  a 
power  of  exclusion  existed  and  was  limited  only  by 
direct  constitutional  prohibitions  or  by  the  constitu- 

1 188  U.  S.  321. 


144  SOCIAL  REFORM  AND  THE  CONSTITUTION 


tional  guaranties  of  private  rights.  The  state  power 
of  excluding  foreign  corporations  has  been  noticed 
above.  To  say  nothing  of  the  clause  as  to  the  im¬ 
pairment  of  the  obligation  of  contracts,  the  guaran¬ 
ties  of  the  fourteenth  amendment  limit  the  states  as 
closely  as  those  of  the  fifth  amendment  limit  the 
federal  government.  Further  argument  does  not  seem 
to  be  required. 

The  further  problem  of  the  effect  upon  property 
rights  of  the  exclusion  from  interstate  commerce  of 
corporations  whose  participation  in  such  commerce 
has  been  tacitly  recognized  by  Congress  cannot  be 
considered  within  the  limits  of  this  chapter.1  It 
would  be  most  unfortunate  if  Congress  were  to  be 
recognized  as  having  the  power  practically  to  con¬ 
fiscate  property,  and  it  is  not  believed  that  either 
Congress  or  a  state  has  any  such  power  in  its  dealings 
with  corporations.  Without  such  power,  the  con¬ 
gressional  authority  over  new  corporations  and  the 
Congressional  powers  of  justifiable  police  control  over 
corporations  already  participating  in  interstate  com¬ 
merce  are  amply  sufficient  to  secure  every  end  of  a 
sane  legislative  policy. 

It  has  already  been  shown  that  the  power  of  grant¬ 
ing  licenses  to  individuals  has  the  same  extent  as  that 
of  erecting  corporations.  It  may  be  added  that  the 
power  of  excluding  individual  participation  in  inter¬ 
state  commerce  is  fundamentally  the  same  as  that 
of  excluding  corporations.  There  is,  however,  this 
important  difference.  A  corporation  which  has  not 
been  directly  or  tacitly  admitted  to  a  participation 

1  But  cf.  The  Commodities  case,  United  States  v.  Delaware  and 
Hudson  Company,  213  U.  S.  366. 


FEDERAL  INCORPORATION 


145 


in  such  commerce  has  absolutely  no  implied  right 
to  such  admission.  An  individual  always  has  this 
right,  subject  to  a  reasonable  police  control.  This 
control  must  be  in  the  interest  of  the  public  welfare 
and  must  have  a  reasonable  relation  to  the  good  con¬ 
duct  of  interstate  commerce.  Its  general  scope  is 
the  same  as  that  of  the  control  over  corporations  al¬ 
ready  admitted  to  interstate  commerce.  Its  exact 
delimitation  would  require  a  discussion  far  too  ex¬ 
tended  to  be  included  in  the  present  chapter;  but 
the  general  principle  is  sufficiently  clear. 

The  conclusions  of  this  chapter  may  be  summed  up 
in  a  sentence :  Congress  has  full  constitutional  power 
to  create  a  system  of  interstate  commerce  under  com¬ 
plete  federal  control,  to  include  within  that  system, 
the  manufacture  or  other  production  of  goods  to  be 
passed  in  such  commerce,  and  to  protect  this  system, 
in  all  its  details,  from  any  species  of  state  interfer¬ 
ence.  Thus  baldly  stated,  these  conclusions  may 
appear  to  be  somewhat  radical.  But  it  is  hoped  that 
they  have  been  justified  by  the  reasoning  and  prece¬ 
dents  which  have  been  advanced  in  their  support. 
It  is  also  believed  that  it  cannot  be  successfully  dis¬ 
puted  that  such  a  system,  so  far  from  imperiling 
private  rights,  is  absolutely  necessary  for  their  pro¬ 
tection  —  a  task  to  which  the  system  of  divided  con¬ 
trol  over  interstate  commerce  is  palpably  unequal. 


L 


CHAPTER  IV 


THE  POWER  OF  CONGRESS  OVER  THE  PRIVATE 
LAW  IN  FORCE  IN  THE  UNITED  STATES 

In  some  of  the  federal  systems  of  government 
which  have  been  organized  since  the  adoption  of  the 
United  States  constitution,  the  establishment  of 
the  federal  system  has  had  for  its  consequence  the 
unification  or  the  possibility  of  the  unification  of 
the  private  law  in  force  in  the  confederated  states. 
Such,  for  example,  was  the  case  in  Germany.  In 
Germany,  the  process  of  unification  of  the  law  has 
proceeded  quite  slowly,  but  the  adoption  in  recent 
years  of  the  Imperial  Civil  Code  is  evidence  of  the 
fact  that  the  process  has  now  been  practically  com¬ 
pleted. 

In  the  United  States,  however,  the  necessity  of  an 
express  provision  for  a  uniform  law  of  private  rela¬ 
tions  was  hardly  thought  to  exist  at  the  time  of  the 
adoption  of  the  constitution,  and  as  a  result  the  con¬ 
stitution  contained  no  section  which  can  be  regarded 
as  having  been  consciously  intended  to  bring  about 
such  unification  of  the  law.  Indeed,  the  passage  by 
the  first  Congress  of  the  Judiciary  Act  is  evidence, 
as  will  be  pointed  out,  of  the  feeling  on  the  part  of 
the  men  then  at  the  head  of  public  affairs  that  the  laws 
of  the  several  states  should  remain  intact. 

146 


PRIVATE  LAW 


147 


The  reasons  for  this  failure  to  recognize  the  ex¬ 
pediency  of  providing  for  a  national  law  were  prob¬ 
ably  to  be  found,  first,  in  the  economic  and  social 
diversity  of  the  different  states,  to  which  attention 
has  been  directed  and  which  was  such  a  potent  in¬ 
fluence  in  preventing  the  adoption  of  any  plan  of 
government  based  on  the  theory  of  a  centralized  politi¬ 
cal  organization.  These  reasons  are  probably  also  to 
be  found  in  the  further  fact  that  most  of  the  law  then 
in  force  in  the  states  was  the  unwritten  common  law 
rather  than  the  written  statute  law,  and  that  this 
unwritten  common  law  was  in  very  large  degree  the 
English  common  law.  In  other  words,  the  law  in 
force  in  the  thirteen  original  states  was  actually 
reasonably  uniform,  and  there  was  no  particular 
reason  for  anticipating  that  such  uniformity  as  existed 
would  cease  to  exist.  In  any  case  the  uniformity 
which  did  exist  was  sufficiently  great  not  to  cause 
any  particular  embarrassment  in  the  economic  con¬ 
ditions  of  the  time. 

With,  however,  the  increase  in  the  centralization 
of  economic  conditions  due  particularly  to  the  improve¬ 
ment  in  the  means  of  communication  and  the  conse¬ 
quent  enlargement  of  the  area  over  which  commercial 
transactions  extend,  and  with  the  increase  in  the  mo¬ 
bility  of  the  population,  the  need  for  greater  uniformity 
in  the  law  has  become  apparent.  While  economic 
centralization  has  thus  in  many  directions  made 
uniformity  in  the  law  more  necessary  than  it  once 
was,  influences  have  been  at  work  which  have  actually 
produced  diversity  in  the  law  rather  than  increased 
uniformity.  The  greater  number  of  courts  of  last 
resort  which  has  followed  upon  the  increase  in  the 


148  SOCIAL  REFORM  AND  THE  CONSTITUTION 


number  of  the  states,  together  with  the  decreasing 
authority  of  the  decisions  of  English  courts  has  been 
one  of  these  influences.  Another  is  to  be  found 
in  the  increasing  amount  of  statute  law.  The  in¬ 
crease  of  the  statute  law  has  been  due  to  the  crystalli¬ 
zation  of  the  common  law  under  the  influence  of  the 
doctrine  of  stare  decisis  and  the  apparent  inability 
of  the  courts  to  change  a  rule  applied  in  a  long  series 
of  decisions,  although  the  rule  may  have  become 
unsuited  to  the  conditions  in  which  it  is  sought  to 
apply  it.  Legislatures  of  different  states  not  being 
controlled  by  any  necessity  of  following  precedent, 
have,  where  it  has  seemed  necessary  to  change  the 
common  law,  amended  that  law  in  different  ways. 
The  result  has  been  that  although  economic  conditions 
have  been  centralized  during  our  century  and  a 
quarter  of  national  life,  our  law  has  probably  become 
less  uniform  than  it  was. 

The  attempt  has  been  made,  as  has  been  intimated, 
in  those  instances  where  lack  of  uniformity  has  been 
most  productive  of  evil,  e.g.  in  the  law  of  commercial 
relations,  to  secure  the  desired  uniformity  through 
cooperation  on  the  part  of  the  states.  State  com¬ 
missions  for  uniform  legislation  have  done  consid¬ 
erable  work  in  this  direction,  though  it  must  be 
confessed  their  actual  accomplishments  have  hardly 
been  commensurate  with  the  efforts  made,  while  the 
“ House  of  Governors”  meets  annually  in  the  hope  of 
helping  along  the  good  work.  These  methods  to 
which  resort  has  been  had,  in  order  to  rid  us  of  the 
lack  of  uniformity  in  the  law  which  most  persons  in 
the  United  States  deplore,  while  probably  not  uncon¬ 
stitutional,  are,  it  may  be  said,  distinctly  extracon- 


PRIVATE  LAW 


149 


stitutional,  rather  ineffective  and  extremely  slow  in 
their  operation.  It  is  the  purpose  of  this  chapter 
to  inquire  whether  the  constitution  of  the  United 
States,  as  it  has  been  or  may  properly  be  interpreted 
by  the  Supreme  Court,  offers  a  means  which  is  at  the 
same  time  constitutional  and  effective,  and  may  be 
expected  to  secure  a  practical  uniformity  in  our  law 
within  a  reasonable  period  of  time. 

As  the  making  of  law  is  particularly  the  function  of 
the  legislature,  such  a  means  must  be  sought  in  the 
legislative  powers  of  the  Congress  of  the  United  States. 

Most  of  the  legislative  powers  of  the  Congress  are 
to  be  found,  as  has  been  said,  in  Art.  I,  Sec.  8  of 
the  constitution ;  but  from  the  beginning  of  our  his¬ 
tory  as  a  nation  the  Supreme  Court  of  the  United 
States  has  recognized  that  Congress  derives  powers 
of  legislation  from  other  articles.  The  most  impor¬ 
tant  of  such  other  articles  is  Art.  Ill,  which  both 
defines  the  judicial  power  of  the  United  States  and 
vests  it  in  one  Supreme  Court  and  such  inferior  courts 
as  Congress  shall  from  time  to  time  ordain  and  es¬ 
tablish.1 

This  article  does  not  contain  a  word  about  Congress 
or  its  powers,  but  taken  in  connection  with  Art.  I, 

1  Section  2  of  this  article  provides  that  “The  judicial  power  shall 
extend  to  all  Cases,  in  Law  and  Equity,  arising  under  this  Constitu¬ 
tion,  the  Laws  of  the  United  States,  and  Treaties  made,  or  which  shall 
be  made,  under  their  authority ;  —  to  all  Cases  affecting  Ambassadors, 
other  public  ministers  and  Consuls ;  —  to  all  Cases  of  admiralty  and 
maritime  Jurisdiction ;  —  to  Controversies  to  which  the  United  States 
shall  be  a  party ;  —  to  Controversies  between  two  or  more  States ;  — 
between  Citizens  of  different  states,  —  between  Citizens  of  the  same 
State  claiming  Lands  under  Grants  of  different  states,  and  between 
a  State,  or  the  citizens  thereof,  and  foreign  States,  Citizens,  or  Sub¬ 
jects.” 


150  SOCIAL  REFORM  AND  THE  CONSTITUTION 

Sec.  8,  Paragraph  19,  which  gives  to  Congress  the 
power  to  pass  all  laws  necessary  and  proper  for  carry¬ 
ing  out  any  power  conferred  upon  the  United  States 
or  any  department  or  officer  thereof,  it  has  been  con¬ 
strued  as  conferring  upon  Congress  the  power  in  cer¬ 
tain  instances  to  determine  what  shall  be  the  law  to 
be  applied  by  the  United  States  Courts  in  the  exercise 
of  the  judicial  power  conferred  upon  them  by  the 
judicial  article. 

Let  us  now  endeavor  to  ascertain  from  an  exam¬ 
ination  of  the  decisions  of  the  Supreme  Court  and  a 
study  of  our  legislative  history  :  (1)  what  is  the  legis¬ 
lative  power  of  Congress,  which  may  be  derived  from 
the  judicial  article;  (2)  from  a  consideration  of  the 
action  of  Congress,  how  far  the  power  has  been  ex¬ 
ercised  by  that  body ;  and  (3)  what  effects  upon  our 
law  as  a  whole  would  result  from  an  occupation  by 
Congress  of  the  entire  field  recognized  as  belonging 
to  it. 

I 

First,  what  is  the  extent  of  the  legislative  power 
of  Congress  which  may  be  derived  from  the  judicial 
article  of  the  constitution  ? 

The  first  intimation  by  the  Supreme  Court  that 
Congress  possessed  any  legislative  power  as  a  con¬ 
sequence  of  the  provision  of  the  judicial  article  is  to 

be  found  in  United  States  v.  Bevans.1  In  this  case 

\ 

the  question  before  the  court  was  whether  the  United 
States  court  had  jurisdiction  of  a  murder  committed 
on  a  United  States  man-of-war  lying  in  Boston  harbor, 
and  its  decision  involved  the  construction  of  an  act 
of  Congress. 


1  3  Wheaton,  336  (1818). 


PRIVATE  LAW 


*5* 

Chief  Justice  Marshall,  in  deciding  that  jurisdic¬ 
tion  had  not  been  ceded  by  Massachusetts  to  the 
United  States,  said:  “It  is  contended  to  have  been 
ceded  by  that  article  in  the  constitution,  which  de¬ 
clares  that  ‘  the  judicial  power  shall  extend  to  all  cases 
of  admiralty  and  maritime  jurisdiction.’  The  argu¬ 
ment  is,  that  the  power  thus  granted  is  exclusive; 
and  that  the  murder  committed  by  the  prisoner  is 
a  case  of  admiralty  and  maritime  jurisdiction.  Let 
this  be  admitted.  It  proves  the  power  of  Congress 
to  legislate  in  the  case;  not  that  Congress  has  exer¬ 
cised  that  power.” 

For  a  considerable  period  of  our  history,  however, 
little  if  any  reliance  was  placed  upon  the  theory  that 
Congress  received  from  the  third  article  legislative 
power  with  regard  to  anything  but  the  organization, 
jurisdiction,  and  procedure  of  the  courts,  and  partic¬ 
ularly  the  inferior  courts,  of  the  United  States.  That 
Congress  had  powers  of  legislation  with  regard  to 
these  matters  was,  however,  recognized  very  early 
in  our  history.  Thus  in  Wayman  v.  Southard 1  in 
answering  the  objection  that  “the  government  of  the 
Union  cannot,  by  law,  regulate  the  conduct  of  its 
officers  in  the  service  of  executions  on  judgments 
rendered  in  the  federal  courts;  but  that  the  state 
legislatures  retain  complete  authority  over  them,” 
Chief  Justice  Marshall  said : 

“  The  court  cannot  accede  to  this  novel  construction.  The 
constitution  concludes  its  enumeration  of  granted  powers,  with 
a  clause  authorizing  Congress  to  make  all  laws  which  shall  be 
necessary  and  proper  for  carrying  into  execution  the  foregoing 
powers,  and  all  other  powers  vested  by  this  constitution  in  the 

1  io  Wheaton,  i,  22. 


152  SOCIAL  REFORM  AND  THE  CONSTITUTION 


government  of  the  United  States  or  in  any  department  or  offi¬ 
cer  thereof.  The  judicial  department  is  invested  with  jurisdic¬ 
tion  in  certain  specified  cases,  in  all  of  which  it  has  power  to 
render  judgment.  That  a  power  to  make  laws  for  carrying  into 
execution  all  the  judgments  which  the  judicial  department  has 
power  to  pronounce  is  expressly  conferred  by  this  clause  seems 
to  be  one  of  those  plain  propositions  which  reasoning  cannot 
make  plainer.  The  terms  of  the  clause  neither  require  nor  ad¬ 
mit  of  elucidation.  The  court,  therefore,  will  only  say,  that 
no  doubt  whatever  is  entertained  on  the  power  of  Congress  over 
the  subject.” 

It  is  true  that  Section  34  of  the  original  Judiciary 
Act,  now  Section  721,  of  the  Revised  Statutes,  did 
provide  that,  “except  where  otherwise  provided  by 
the  Constitution,  treaties  or  statutes  of  the  United 
States,  the  laws  of  the  several  states  are  to  be  re¬ 
garded  as  rules  of  decision  in  trials  at  common  law 
in  the  courts  of  the  United  States  where  they  apply  ”  ; 
and  that  this  act  as  amended  in  1792  also  provided 
that  the  forms  and  modes  of  proceeding  in  equity  and 
admiralty  proceedings  should  be  according  to  the 
practice  of  courts  of  equity  and  admiralty,  subject 
to  alteration  by  rules  to  be  made  by  the  Supreme 
Court.  This  enactment  naturally  involved  a  claim 
upon  the  part  of  Congress  of  a  legislative  power  based 
upon  the  third  article  of  the  constitution.1  The 

1  In  a  number  of  cases,  the  most  important  of  which  is  Wayman  v. 
Southard,  io  Wheaton,  48,  it  has  been  said  that  in  the  absence  of 
action  by  Congress  the  federal  courts  would  have  adopted  this  rule. 
But  this  statement  does  not  mean  that  Section  34  of  the  Judiciary 
Act  was  declaratory  of  any  constitutional  principle,  but  rather  that  the 
courts  of  the  United  States,  following  the  rules  which  are  recognized 
in  cases  of  conflicts  of  law,  (cf.  Wisconsin  v.  Pelican  Insurance  Com¬ 
pany,  127  U.  S.  265),  would  have  applied  the  local  law  properly  appli¬ 
cable  to  the  contract  or  other  legal  relation  at  issue.  The  action  of 
courts  in  such  cases,  it  is  to  be  borne  in  mind,  is  based,  in  the  absence 


PRIVATE  LAW 


*53 


action  taken  by  Congress  incidental  to  the  asser¬ 
tion  of  this  claim  was,  however,  so  modest  that  no 
objection  was  made  to  it  in  any  quarter;  and  from 
that  time  to  this  the  courts  of  the  United  States  have 
been  regarded  in  the  main  as  tribunals  which,  free 
from  local  prejudice,  are  called  upon  to  determine 
those  cases  and  controversies  over  which  they  have 
jurisdiction  in  accordance  with  the  principles  of  law 
in  force  in  the  particular  states  in  which  they  sit. 
For  a  long  time  it  was  not  apparently  believed  that 
the  third  article  of  the  constitution  conferred  upon 
Congress  any  legislative  power  with  regard  to  the  sub¬ 
stantive  law  to  be  applied  by  the  federal  courts  in  the 
exercise  of  their  acknowledged  jurisdiction.  At  any 
rate,  Congress  made  no  attempt  to  exercise  any  such 
power. 

In  one  branch  of  the  law,  however,  the  courts  of  the 
United  States  began  at  an  early  time  to  administer 
a  law  which  was  not  found  in  the  “laws  of  the  several 
states.”  This  was  the  admiralty  or  maritime  law. 
This  exception  to  the  general  rule  has  been  based  upon 
two  distinct  grounds. 

In  the  first  place,  in  that  section  of  the  Judiciary 
Act  which  is  now  Section  711  of  the  Revised  Statutes, 
Congress  provided  that  the  admiralty  and  maritime 
jurisdiction  of  the  United  States  district  courts,  then 
established,  should  be  exclusive,  “saving  to  suitors 
in  all  cases  the  right  of  a  common  law  remedy,  where 
the  common  law  is  competent  to  give  it.”  This 
clause  has  been  interpreted  as  giving  to  the  district 

of  legislative  provisions,  upon  considerations  of  expediency  and  of 
comity  rather  than  upon  constitutional  or  legal  obligation.  See 
remarks  by  Marshall  in  the  Virginia  Convention.  Infra,  p.  188. 


154  SOCIAL  REFORM  AND  THE  CONSTITUTION 


courts  of  the  United  States  exclusive  jurisdiction  in 
all  cases  in  which  the  remedy  sought  is  an  action  pri¬ 
marily  in  rent  against  an  offending  vessel.1  At  first 
the  admiralty  jurisdiction  of  the  United  States  was 
supposed  to  extend  merely  to  waters  affected  by  the 
ebb  and  flow  of  the  tide.2  So  long  as  this  was  the 
recognized  rule,  the  states  endeavored  to  regulate 
the  legal  relations  of  vessels,  arising  in  waters  not 
considered  to  be  within  the  admiralty  jurisdiction  of 
the  United  States,  by  legislation,  which  provided 
remedies  to  be  administered  by  the  ordinary  state 
courts  similar  to,  if  not  identical  with,  admiralty 
remedies.  Later  in  the  history  of  the  country  the 
Supreme  Court  changed  its  view  as  to  what  were 
navigable  waters  of  the  United  States.  In  1851,  in 
the  Genesee  Chief  v.  Fitzhugh,3  and  in  1857,  in  The 
Steamboat  Magnolia,4  it  laid  down  the  rule  that 
navigable  waters  subject  to  the  admiralty  jurisdiction 
of  the  United  States  are  waters  actually  navigable, 
upon  which  commerce  with  foreign  countries  or  be¬ 
tween  the  several  states  is  carried  on.5  When  this 
determination  was  reached,  it  was  believed  that  the 
state  legislation  referred  to,  which  provided  for  the 
administration  by  state  courts  of  admiralty  remedies 
as  to  matters  arising  on  state  waters,  ceased  to  have 
any  effect,  and  that  the  jurisdiction  of  the  admiralty 
courts  of  the  Unted  States  was  as  exclusive  over  what 
had  been  regarded  as  state  waters,  but  now  were 
regarded  as  United  States  waters,  as  it  had  been  from 

1  The  Moses  Taylor  (1866),  4  Wallace,  411. 

2  The  Thomas  Jefferson  (1825),  10  Wheaton,  428. 

*  12  Howard,  443.  4  20  Howard,  296. 

5  See  Leovy  v.  United  States,  177  U.  S.  621. 


PRIVATE  LAW 


*55 


the  beginning  over  tidal  waters.1  The  Supreme  Court 
admitted,  indeed,  that  the  reservation  in  the  Judiciary- 
Act  touching  common  law  remedies  still  permitted 
the  state  courts  to  take  jurisdiction  of  actions  in 
maritime  contract  and  tort,  provided  the  remedy  was 
primarily  in  personam  rather  than  in  rem.2 

In  what  were  regarded  as  admiralty  proceedings  in 
the  strict  sense,  i.e.  in  actions  in  rem  against  vessels, 
not  being  obliged  by  Congress  to  follow  state  laws, 
the  courts  of  the  United  States  applied  the  admiralty 
or  maritime  law,  which  they  described  as  a  sort  of 
world  law,  and  which  they  gradually  elaborated  and 
developed  in  their  decisions.  In  the  meantime,  how¬ 
ever,  the  Congress  of  the  United  States  had  been 
passing  a  whole  body  of  legislation  concerning  the 
registry  and  license  of  vessels,  the  inspection  of  steam 
vessels,  the  duties  of  masters  and  seamen,  and  the 
rights  and  liabilities  of  shippers  and  shipowners. 
The  states  also  passed  many  laws  on  the  same  sub¬ 
jects;  for  the  states  were  recognized  as  having,  in 
the  absence  of  Congressional  regulation,  a  concurrent 
power  of  legislation  as  to  many  parts  of  the  sub¬ 
stantive  law,3  and  the  state  courts  have  jurisdiction 
of  the  cases  arising  under  such  laws  provided  the 
remedy  given  by  them  is  a  common  law  remedy.4 
In  case,  however,  such  laws  provide  for  a  maritime 
lien  not  recognized  by  the  general  maritime  law,  they 
will  be  applied  by  the  admiralty  courts  of  the  United 
States,  which  further  have  exclusive  jurisdiction.5 

1  The  Hine  v.  Trevor  (1866),  4  Wallace,  555. 

2  Ibid.;  Knapp,  Stout  &  Co.  v.  McCaffery,  177  U.  S.  638,  and  cases 
cited ;  The  Hamilton,  207  U.  S.  398. 

3  Sherlock  v.  Ailing,  83  U.  S.  99 ;  The  Hamilton,  207  U.  S.  398. 

4  Ibid.  6  The  J.  E.  Rumbell,  148  U.  S.  1. 


156  SOCIAL  REFORM  AND  THE  CONSTITUTION 


For  a  long  time,  notwithstanding  Chief  Justice 
Marshall’s  suggestion  in  United  States  v.  Bevans1 
it  was  believed,  as  has  been  shown,  that  the 
power  of  Congress  to  legislate  with  regard  to  the 
maritime  law  was  derived  from  the  power  to  regu¬ 
late  commerce,  which  early  in  our  history  had  been 
held  to  include  navigation.1  But  when  the  admir¬ 
alty  jurisdiction  was  extended  over  what  had  pre¬ 
viously  been  regarded  as  state  waters,  it  was  appar¬ 
ently  believed  by  the  United  States  courts  that  a 
wider  Congressional  power  to  regulate  the  maritime 
law  could  be  found  in  the  judicial  article  of  the 
constitution  than  in  the  clause  empowering  Con¬ 
gress  to  regulate  commerce.  In  a  series  of  cases, 
ending  with  In  re  Garnett,  decided  in  1890, 2  the 
Supreme  Court  has  adopted  unequivocally  the 
view  that  Congress  has  a  power  to  fix  and  deter¬ 
mine  the  maritime  law,  because  the  courts  of 
the  United  States  are  clothed,  under  Art.  Ill 
of  the  constitution,  with  the  power  to  decide  ad¬ 
miralty  cases.  It  may  therefore  be  said  that  Con¬ 
gress  derives  legislative  power  from  that  part  of  the 
judicial  article  of  the  constitution  which  provides 
that  the  judicial  power  of  the  United  States  shall 
extend  to  all  cases  of  admiralty  and  maritime  jurisdic¬ 
tion.  It  is  interesting  to  note  that  Mr.  Justice  Holmes 
says  in  The  Hamilton  3  in  regard  to  the  saving  of  the 
common  law  remedy  to  suitors  that  it 

“  leaves  open  the  common  law  jurisdiction  of  the  state  courts 
over  torts  committed  at  sea.  .  .  .  And  as  the  state  courts  in 
their  decisions  would  follow  their  own  notions  about  the  law 
and  might  change  them  from  time  to  time,  it  would  be  strange 

1  Cf.  supra ,  p.  150.  2  141  U.  S.  1.  8  207  U.  S.  398. 


PRIVATE  LAW 


157 


if  the  state  might  not  make  changes  by  its  other  mouthpiece, 
the  legislature.  The  same  argument  that  deduces  the  legisla¬ 
tive  power  of  Congress  from  the  jurisdiction  of  the  national 
courts  tends  to  establish  the  legislative  power  of  the  state  where 
Congress  has  not  acted.  Accordingly,  it  has  been  held  that  a 
statute  giving  damages  for  death  caused  by  a  tort  might  be 
enforced  in  a  state  court,  although  the  tort  was  committed  at 
sea.” 

The  substantive  maritime  law  is,  therefore,  first, 
the  general  maritime  law  of  the  world,  so  far  as  rec¬ 
ognized  by  the  decisions  of  the  admiralty  courts 
of  the  United  States;  second,  acts  of  Congress;  and 
third,  acts  of  the  state  legislatures  not  inconsistent  with 
acts  of  Congress. 

It  is  to  be  remembered,  however,  that  the  judicial 
power  of  the  United  States,  according  to  the  provisions 
of  the  third  article  of  the  constitution,  extends  to 
several  classes  of  cases  other  than  cases  of  admiralty 
and  maritime  jurisdiction.  The  question  accordingly 
presents  itself :  Does  Congress  obtain  from  the 
judicial  article  the  same  power  of  legislation  in  these 
other  classes  of  cases  which  it  is  recognized  as  obtain¬ 
ing  in  admiralty  and  maritime  cases? 

To  answer  this  question  we  must  consider  the 
judicial  article  in  some  detail.  The  cases  enumerated 
fall  into  two  classes.  The  first  class  includes  all  cases 
in  law  or  equity  arising  under  the  constitution,  the  laws 
of  the  United  States  and  treaties  made  or  to  be  made 
under  their  authority,  all  cases  affecting  ambassadors, 
other  public  ministers  and  consuls,  and  all  cases  of 
admiralty  and  maritime  jurisdiction.  The  second 
class  includes  controversies  to  which  the  United  States 
shall  be  a  party,  controversies  between  two  or  more 
states,  between  citizens  of  different  states,  between 


158  SOCIAL  REFORM  AND  THE  CONSTITUTION 


a  state  and  citizens  of  another  state,  between  citizens 
of  the  same  state  claiming  lands  under  grants  from 
different  states,  and  between  a  state  or  the  citizens 
thereof  and  foreign  states,  citizens  or  subjects.  This 
clause  was  amended  by  the  eleventh  amendment  so 
as  to  exclude  from  the  judicial  power  of  the  United 
States  “any  suit  in  law  or  equity,  commenced  or 
prosecuted  against  one  of  the  United  States  by  citizens 
of  another  state  or  by  citizens  or  subjects  of  any 
foreign  state.”  1 

These  two  classes  of  cases  are  to  be  distinguished, 
because  to  those  enumerated  in  the  first  class  is  prefixed 
the  word  “all,”  and  because  those  in  the  first  class  are 
referred  to  as  “cases”  and  those  in  the  second  as 
“controversies.”  The  use  of  the  word  “all”  in  the 
first  class  of  cases  and  its  omission  in  the  second  are 
not,  however,  considered  to  be  of  any  special  sig¬ 
nificance.  The  article  is  certainly  not  regarded  as 
conferring  upon  the  United  States  courts  exclusive 
jurisdiction  in  the  one  class  of  cases  a  d  concurrent 
jurisdiction  in  the  other.  The  Supreme  Court,  on  the 
contrary,  has  adopted  the  view  that  the  exclusiveness 
or  concurrency  of  the  jurisdiction  of  the  courts  of  the 
United  States  is  dependent  upon  the  action  of  Con¬ 
gress,  which  has  the  right  in  all  cases  to  make  the 
federal  jurisdiction  exclusive  or  concurrent  if  it  sees 
fit  to  do  so.2  The  difference  between  “case”  and 

1  This  amendment  has  been  interpreted  to  include  suits  brought 
against  a  state  by  its  own  citizens.  Hans  v.  Louisiana,  134  U.  S.  1. 

2  Thus  in  The  Moses  Taylor,  4  Wallace,  428,  the  court  says :  “The 
Judiciary  Act  of  1789,  in  its  distribution  of  jurisdiction  to  the  several 
federal  courts,  recognizes  and  is  framed  upon  the  theory  that  in  all 
cases  to  which  the  judicial  power  of  the  United  States  extends,  Con¬ 
gress  may  rightfully  vest  exclusive  jurisdiction  in  the  federal  courts.” 


PRIVATE  LAW 


159 


“ controversy,”  while  from  some  points  of  view  im¬ 
portant,  has  little  significance  for  the  present  investi¬ 
gation.  It  is  to  be  said,  however,  that  the  jurisdic¬ 
tion  of  the  federal  courts  is  wider  in  “controversies” 
than  in  “cases.”  Thus  it  has  been  held  that,  al¬ 
though  these  courts  have  no  jurisdiction  to  probate 
wills,  they  have  jurisdiction  to  hear  and  determine 
controversies  between  citizens  of  different  states, 
the  purpose  of  which  is  to  annul  a  will  already 
probated.1 

It  is  further  to  be  noticed,  as  Chief  Justice  Marshall 
pointed  out  in  Cohens  v.  Virginia,2  that  the  cases  in 
which  jurisdiction  is  given  to  the  courts  of  the  Union 
may  be  grouped  in  two  classes  from  another  point  of 
view :  — 

“In  the  first,  their  jurisdiction  depends  on  the  character  of 
the  cause,  whoever  may  be  the  parties.  This  class  comprehends 
‘  all  cases  in  law  and  equity  arising  under  this  constitution,  the 
laws  of  the  United  States,  and  treaties  made,  or  which  shall  be 
made,  under  their  authority.’  [Cases  of  admiralty  and  maritime 
jurisdiction  are  usually  regarded  as  included  in  this  class.]  .  .  . 
In  the  second  class,  the  jurisdiction  depends  entirely  on  the 
character  of  the  parties.  In  this  are  comprehended  ‘  contro¬ 
versies  between  two  or  more  states,’  ‘between  a  state  and  citi¬ 
zens  of  another  state’  and  ‘between  a  state  .  .  .  and  foreign 
states,  citizens  or  subjects.’  [Controversies  between  citizens 
of  different  states  and  between  citizens  and  aliens  are  of  4  his 
class.]  If  these  be  the  parties,  it  is  unimportant  what  may  be  the 
subject  of  the  controversy.  Be  it  what  it  may,  these  parties  have 
the  constitutional  right  to  come  into  the  courts  of  the  Union.” 

In  the  same  way  it  has  been  held  that  the  word  “all”  preceding  the 
word  “cases”  does  not  give  either  the  United  States  courts  or  the 
Supreme  Court,  where  it  is  used  with  regard  to  the  jurisdiction  of  that 
body,  exclusive  jurisdiction.  See  Bors  v.  Preston,  hi  U.  S.  252, 
and  cases  cited. 

1  Infra,  pp.  197  et  seq. 


2  6  Wheaton,  264. 


160  SOCIAL  REFORM  AND  THE  CONSTITUTION 


It  may  perhaps  be  urged  that  in  the  first  class  of 
cases,  i.e.  those  in  which  the  federal  courts  have  juris¬ 
diction  on  account  of  the  subject  matter,  Congress 
has  greater  independence  in  determining  what  law 
shall  be  applied  than  it  has  in  the  second,  in  which 
jurisdiction  is  obtained  by  reason  of  the  character  of 
the  parties ;  and  it  is  true  that  the  instances  in  which 
Congress  has  endeavored  to  fix  the  law  to  be  applied, 
irrespective  of  the  law  of  the  states,  are  more  marked 
in  the  former  than  in  the  latter  class.  But,  as  will  be 
pointed  out,1  the  branch  of  law  in  which  the  Supreme 
Court  has  displayed  the  greatest  independence  of  state 
law  has  been  the  commercial  law,  and  in  the  great 
majority  of  commercial  cases  the  federal  courts  obtain 
jurisdiction  only  by  reason  of  the  diversity  of  citizen¬ 
ship  of  the  parties.  It  can  hardly  be  said,  therefore, 
that  the  power  of  legislation  which  Congress  derives 
from  this  clause  can  be  determined  by  this  distinction. 
Furthermore,  as  has  been  shown,  “cases  of  admiralty 
and  maritime  jurisdiction”  which  are  usually  regarded 
as  within  the  judicial  power  of  the  United  States  be¬ 
cause  of  the  character  of  the  subject  matter,  are  after 
all  to  be  distinguished  from  other  cases  more  because 
of  the  combination  of  the  kind  of  remedy  used,  i.e.  an 
action  in  rent ,  and  the  character  of  the  party  or  rather 
the  subject  of  the  suit,  i.e.  a  vessel  on  the  navigable 
waters  of  the  United  States,  than  because  of  the  nature 
of  the  law  applied.2  Before  it  had  been  decided  that 


1  Infra ,  pp.  172  et  seq. 

2  This  would  appear  to  be  absolutely  true  of  marine  torts.  In 
the  case  of  contracts,  however,  in  order  that  an  admiralty  court  may 
have  jurisdiction,  the  contract  must  be  maritime  in  its  nature.  See 
Hughes,  “Handbook  of  Admiralty  Law,”  p.  16. 


PRIVATE  LAW 


161 


admiralty  jurisdiction  extended  to  our  Western  inland 
waters,  state  courts  administered  practically  the  same 
sort  of  law  now  administered  by  the  United  States 
admiralty  courts.  The  legislative  power  of  Congress 
over  maritime  matters  has  extended  to  these  cases 
with  the  extension  of  the  jurisdiction  of  the  admiralty 
courts  of  the  United  States. 

From  the  viewpoint  of  this  investigation  we  may 
therefore  treat  the  various  cases  subjected  to  the 
judicial  power  of  the  United  States  as  possessing  the 
same  character.  The  result  is  that  the  recognition 
that  Congress  possesses  the  legislative  power  under 
one  clause  in  the  judicial  article  involves  the  recogni¬ 
tion  of  the  same  power  under  the  other  clauses,  unless 
the  question  is  affected,  on  the  one  hand,  by  the  express 
provisions  of  the  constitution  granting  powers  or  im¬ 
posing  limitations  on  Congress,  or,  on  the  other  hand, 
by  the  general  spirit  of  the  constitution  considered 
as  a  whole. 

Let  us  then  take  up,  one  by  one,  the  cases  included 
within  the  judicial  power  granted  by  the  constitution 
and  see  whether  they  are  affected  by  the  other  provi¬ 
sions  of  that  instrument,  either  enabling  or  prohibitory. 

In  the  first  place,  the  judicial  power  of  the  United 
States  extends  to  all  cases  in  law  and  equity  arising 
under  the  constitution,  the  laws  of  the  United  States 
and  treaties  made  or  to  be  made  under  their  authority. 
It  is  quite  evident  that  the  laws  of  the  United  States 
referred  to  in  this  paragraph  are  primarily  the  laws 
which  Congress  has  the  right  to  pass  under  the  other 
provisions  of  the  constitution,  —  for  example,  under 
Art.  I,  Sec.  8 ;  but  the  Supreme  Court  has  as¬ 
sumed,  that  the  words  “law  and  equity”  apply 
u 


1 62  SOCIAL  REFORM  AND  THE  CONSTITUTION 


not  merely  to  the  cases  arising  under  the  constitu¬ 
tion,  the  laws  of  the  United  States  and  treaties, 
but  also  to  the  cases  arising  under  other  grants  of 
judicial  power,  in  the  sense,  at  any  rate,  that  the 
judicial  power  there  granted  embraces  cases  of  both 
law  and  equity.  The  Supreme  Court  has,  however,  in¬ 
timated  that  in  controversies  between  citizens  of  dif¬ 
ferent  states,  the  judicial  power  is  not  limited  to  such 
cases  as  arise  “in  law  and  equity.”  1 

Furthermore,  inasmuch  as  Congress  in  Section  34 
of  the  Judiciary  Act  (now  Section  721  of  the  Revised 
Statutes)  has  provided  that  the  laws  of  the  states 
shall  be  regarded  as  rules  of  decision  only  in  trials  at 
common  law,  the  courts  of  the  United  States  have  felt 
at  liberty  to  develop  their  own  system  of  equity. 
They  have  felt  not  only  at  liberty,  but  even  obliged, 
to  do  so  if  the  United  States  courts  are  to  exercise 
equity  powers.  For  in  some  of  the  states  at  the  time 
of  the  adoption  of  the  constitution,  there  were  no  courts 
of  equity,  while  in  others  equitable  and  legal  remedies 
had  been  joined  in  the  same  forms  of  action.  The 
federal  courts  have  therefore  attempted,  regardless 
of  the  decisions  of  state  courts  and  even  in  some  in¬ 
stances  of  state  statutes,  to  work  out,  in  large  degree 
upon  the  basis  of  the  decisions  of  the  English  Court  of 
Chancery,  a  system  of  equitable  remedies  and  of  equity 
jurisprudence  of  their  own,  which  may  be  in  conflict 
with  the  law  of  some  particular  state  or  states.2  In 

1  Infra,  p.  198. 

2  See  Russell  v.  Southard,  12  Howard,  139,  where  the  Supreme 
Court  of  the  United  States  refused  to  be  guided  by  the  highest  court 
of  the  state  of  Kentucky  in  determining  whether  parol  evidence  was 
admissible  in  an  equitable  action  to  show  that  what  was  apparently 
a  deed  was  intended  as  a  mortgage;  Neves  v.  Scott,  13  Howard,  268, 


PRIVATE  LAW 


163 


so  doing  they  have  obeyed  the  injunction  of  Congress 
(contained  in  Section  913  of  the  Revised  Statutes) 
which  authorizes  the  Supreme  Court  to  adopt  equity 
rules  and  provides  that  the  forms  and  modes  of  pro¬ 
cedure  in  equity  suits  shall  be  in  accordance  with 
the  practice  of  courts  of  equity.  The  Supreme  Court 
has  said,  further,  that  Congress  has  the  right  to  legis¬ 
late  as  to  the  equity  jurisdiction  of  the  United  States 
courts,  and  that,  where  there  is  conflict  between  the 
statutes  of  Congress  and  those  of  the  states  with  regard 
to  this  matter,  the  courts  of  the  United  States  must 
follow  the  statutes  of  Congress.1 

In  matters  affecting  ambassadors,  other  public 
ministers  and  consuls,  little  if  any  legislative  power 
needs  to  be  derived  from  the  judicial  power,  since 
Art.  I,  Sec.  8,  Paragraph  10  of  the  constitution, 
which  empowers  Congress  to  punish  offenses  against 
the  law  of  nations,  gives  the  United  States  ample 
means  of  protecting  through  the  criminal  law  the 
persons  of  diplomatic  agents  against  attack.2  In  so 
far,  however,  as  the  private  legal  relations  of  such 

where  the  Supreme"  Court  refused  to  modify  its  decision,  so  as  to 
accord  with  the  judgment  of  the  highest  state  court  of  Georgia,  as 
to  the  effect  of  a  marriage  settlement ;  and  Payne  v.  Hook,  7  Wallace, 
425,  where  the  Supreme  Court  of  the  United  States  permitted  the 
use  of  an  equitable  remedy  not  permitted  by  the  statutes  of  the  state. 
See  also  McConihay  v.  Wright,  121  U.  S.  201,  206,  and  Scott  v.  Neely, 
140  U.  S.  106,  hi. 

1  Cf.  Neves  v.  Scott,  13  Howard,  268.  In  McConihay  v.  Wright, 
1 21  U.  S.  201,  206,  it  is  said  that  the  equity  jurisdiction  of  the  federal 
courts  “is  vested  as  a  part  of  the  judicial  power  of  the  United  States 
in  its  courts  by  the  constitution  and  acts  of  Congress  in  execution 
thereof.  Without  the  assent  of  Congress  that  jurisdiction  cannot 
be  impaired  or  diminished  by  the  statutes  of  the  several  states  regu¬ 
lating  the  practice  of  their  own  courts.” 

2  United  States  v.  Ortega,  11  Wheaton,  467. 


1 64  SOCIAL  REFORM  AND  THE  CONSTITUTION 


persons  are  concerned,  the  law  is  in  the  same  condition 
as  in  the  other  cases  in  which  the  United  States  courts 
have  jurisdiction  by  reason  of  the  character  of  the 
parties.  The  consideration  of  this  point  may  there¬ 
fore  be  postponed  until  we  examine  those  parts  of  the 
judicial  article. 

In  the  case  of  the  clause  relative  to  admiralty  and 
maritime  jurisdiction,  as  has  been  shown,  the  Supreme 
Court  has  held  that  Congress  derives  from  it  power 
to  fix  the  maritime  law.  It  is  well  to  remember,  how¬ 
ever,  that  for  a  long  time  in  our  history  the  belief  of 
the  court  was  that  Congress  obtained  its  power  to 
legislate  upon  such  matters  from  the  commerce  clause 
rather  than  from  the  admiralty  clause,  and  that  it 
was  only  when  it  was  thought  that  greater  power 
could  be  derived  from  the  latter  clause  that  resort 
was  had  to  it.  It  is  to  be  remembered,  also,  that  the 
states  retain  concurrent  power  to  legislate  in  the  ab¬ 
sence  of  Congressional  action  as  to  many  parts  of  the 
law  of  maritime  tort  and  liability  generally,  and  that 
these  state  laws  will  be  applied  by  the  United  States 
admiralty  courts.  In  other  words,  Congress  has  a 
paramount  power  to  legislate  as  to  the  substantive 
law  of  admiralty  because  of  the  fact  that  the  United 
States  courts  have  exclusive  jurisdiction  of  distinctly 
admiralty  remedies ;  while  the  states  retain  a  con¬ 
current  power  of  legislation  as  to  maritime  matters, 
partly,  at  any  rate,  because  of  the  reservation  by 
Congress  of  the  “common  law  remedy,  where  the  com¬ 
mon  law  is  competent  to  give  it.” 

The  clause  with  reference  to  controversies  to  which 
the  United  States  shall  be  a  party  may  perhaps  be 
regarded  as  authorizing  Congress  to  subject  the  United 


PRIVATE  LAW 


i(55 

States  to  the  liability  to  be  sued  and  to  define  that 
liability.  As  a  matter  of  fact,  Congress  has  so  pro¬ 
vided  in  the  Act  of  1855,  establishing  the  United  States 
Court  of  Claims,  and  in  the  Tucker  Act  of  1887,  making 
the  district  and  circuit  courts  of  claims  for  certain 
classes  of  cases.  Each  of  these  acts  has  introduced 
into  the  law  to  be  applied  in  these  cases  certain  modi¬ 
fications  which  are  binding  upon  the  courts  of  the 
United  States  acting  as  courts  of  claims.1 

We  come  now  to  the  controversies  between  two  or 
more  states,  between  a  state  and  citizens  of  another 
state,  between  citizens  of  different  states,  between 
citizens  of  the  same  state  claiming  lands  under  grants 
of  different  states,  and  between  a  state  or  the  citizens 
thereof  and  foreign  states,  citizens,  or  subjects.  Since 
the  termination,  early  in  our  history,  of  the  contro¬ 
versies  regarding  lands  granted  by  different  states, 
and  since  the  passage  of  the  eleventh  amendment, 
the  only  controversies  in  this  class  which  have  retained 
their  importance  are  those  to  which  a  state  is  a  party, 
those  between  citizens  of  different  states,  and  those 
between  citizens  and  aliens. 

In  a  number  of  instances  the  Supreme  Court  has 
taken  jurisdiction  of  controversies  between  states, 
but  in  few  of  these  cases  has  the  question  been  raised 
as  to  the  power  of  Congress  to  fix  the  law  which  is  to 
be  applied  to  such  cases.  A  marked  exception  to  this 
statement  is  to  be  found,  however,  in  the  case  of 
Kansas  v,  Colorado.2  In  this  case  a  bill  of  equity  was 
filed  in  the  Supreme  Court  by  the  state  of  Kansas 
against  the  state  of  Colorado,  to  restrain  the  latter 

1  The  Floyd  Acceptances,  7  Wallace,  666 ;  Langford  v.  United 
States,  101  U.  S.  341.  2  206  U.  S.  46. 


1 66  SOCIAL  REFORM  AND  THE  CONSTITUTION 


state  from  depriving  the  state  of  Kansas  and  its  in¬ 
habitants  of  the  water  of  the  Arkansas  River,  which, 
it  was  alleged,  was  being  diverted  from  its  natural 
channel  under  the  authority  of  the  state  of  Colorado 
for  the  purpose  of  irrigating  lands  in  that  state. 
Since  this  was  an  equitable  action,  Section  721  of  the 
United  States  Revised  Statutes  did  not  oblige  the 
court  to  regard  the  laws  of  the  several  states  as  the 
rules  of  decision.  The  application  of  the  laws  of  the 
several  states  would,  moreover,  have  been  impossible, 
since  Kansas  held  to  the  common  law  as  to  water 
rights,  while  Colorado  had  abandoned  it.  The  govern¬ 
ment  of  the  United  States  asked  to  intervene  in  the 
case,  alleging  in  its  petition  “that  legislation  of  Con¬ 
gress,  decisions  of  courts,  and  acts  of  the  executive 
department  have  sanctioned  and  approved  the  use 
of  water  for  irrigation  purposes  in  arid  regions,  and  that 
he  who  is  prior  in  time  is  prior  in  right,  and  that  it  is 
recognized  that  the  common  law  doctrine  of  riparian 
rights  is  not  applicable  to  the  public  land  owned  by 
the  United  States  in  the  arid  region.”  The  govern¬ 
ment  also  suggested  that  the  “decree  should  embrace 
in  terms  or  in  effect  a  recognition  of  the  national  law 
and  of  the  government’s  right  to  direct  the  matter 
of  water  distribution  on  this  nonnavigable  stream.” 
In  deciding  this  case  the  Supreme  Court  distinctly 
refused  to  adopt  the  view  that  Congress  had  any 
legislative  power  over  matters  of  irrigation,  even 
when  the  interests  of  two  states  were  affected, 
adopting  the  theory  that  the  United  States  gov¬ 
ernment  is  a  government  of  enumerated  powers, 
and  that,  as  no  power  to  control  irrigation  matters 
had  been  granted  to  Congress,  that  body  could  not 


PRIVATE  LAW  1 67 

lay  down  the  law  which  the  court  was  to  apply  in 
such  cases. 

It  may  therefore  be  said  that  Kansas  v.  Colorado 
is  an  authority  for  the  proposition  that  Congress  has 
no  power  to  lay  down  the  law  to  be  applied  by  the 
Supreme  Court  in  controversies  between  states  as  to 
irrigation  matters.  But  this  case  cannot  be  regarded 
as  authority  for  the  proposition  that  Congress  does 
not  derive  legislative  power  from  the  judicial  article. 

In  the  first  place,  that  particular  point  was  not  raised, 
and  was  therefore  not  decided.  The  counsel  for  the 
government  attempted  to  base  the  power  of  Congress 
to  legislate,  not  upon  the  judicial  article,  but  upon 
the  commerce  clause,  contending  that  commerce  is 
intercourse  in  its  broadest  sense  and  that  “  conflicting 
irrigation  rights  between  two  states  on  the  waters 
of  a  stream  passing  from  one  state  to  another  involve 
the  power  over  interstate  commerce.  Water  is  sold 
for  irrigation  and  flows  downstream  and  along  ditches 
to  the  point  of  delivery.”  This  view  did  not  appeal 
to  the  court,  which  held  that  taking  water  for  purposes 
of  irrigation  did  not  involve  commercial  questions 
except  where  navigation  might  be  affected  thereby. 

In  the  second  place,  the  august  character  of  the 
contesting  parties  in  these  controversies  between 
sovereign  states  has  caused  the  court  to  regard  itself 
as  an  international  tribunal,  which  is  to  apply  the 
principles  of  international  law.  This  law  is  to  be 
derived  from  a  consideration  of  the  customs  and 
usages  of  nations  rather  than  from  the  legislation  of 
a  body  like  Congress. 

It  is  to  be  regretted  that  the  Supreme  Court  has 
adopted  the  view  that  Congress  has  no  power  to  lay 


1 68  SOCIAL  REFORM  AND  THE  CONSTITUTION 

down  the  law  to  be  applied  by  the  Supreme  Court  in 
controversies  between  states.  For,  as  was  said  in 
Missouri  v.  Illinois,1  “in  a  case  which  did  not  fall 
within  the  power  of  Congress  to  regulate,  the  result 
of  a  declaration  of  rights  by  this  court  would  be  the 
establishment  of  a  rule  which  would  be  irrevocable 
by  any  power  except  that  of  this  court  to  reverse  its 
own  decision,  an  amendment  of  the  constitution,  or 
possibly  an  agreement  between  the  states  sanctioned 
by  the  legislature  of  the  United  States.’’  It  is  to  be 
noted  that  one  of  the  arguments  used  by  the  Supreme 
Court  in  favor  of  the  legislative  power  of  Congress 
in  matters  of  maritime  law  is  the  necessity  of  develop¬ 
ing  the  law.  This  argument  would  appear  to  have 
as  much  force  in  the  matter  of  interstate  controversies 
as  in  the  matter  of  the  maritime  law. 

The  decision  of  the  Supreme  Court  in  Kansas  v. 
Colorado  may  accordingly  be  regarded  as  authority 
for  the  statement  that  Congress  derives  no  legislative 
power  from  that  part  of  the  judicial  article  which 
declares  that  the  judicial  power  of  the  United  States 
shall  extend  to  controversies  between  states;  but  it 
cannot  be  said  that,  because  this  is  true,  it  follows  that 
Congress  does  not  derive  legislative  power  from  other 
portions  of  the  judicial  article. 

Controversies  between  a  state  and  citizens  of  an¬ 
other  state  are,  since  the  eleventh  amendment,  con¬ 
troversies  in  which  the  state  is  plaintiff.  They  differ 
from  controversies  between  states  in  that  they  have 
no  international  character,  and  they  are  to  be  treated 
from  much  the  same  point  of  view  as  controversies 
between  citizens  of  different  states. 

1  200  U.  S.  496,  520. 


PRIVATE  LAW 


169 


We  come  then  to  the  consideration  of  controversies 
between  citizens  of  different  states  and  between  citizens 
and  aliens.  Does  Congress  derive  any  legislative 
power  from  this  part  of  the  judicial  article  ? 

Neither  in  the  judicial  article  nor  elsewhere  in  the 
constitution  is  the  exercise  of  such  a  power  expressly 
granted  or  expressly  prohibited.  Conditions  are  the 
same  here  as  in  the  case  of  other  judicial  clauses, 
except  that  the  legislative  power  of  Congress  under 
the  commerce  clause  is  more  closely  related  to  matters 
of  admiralty  and  maritime  jurisdiction  than  to  con¬ 
troversies  between  citizens  of  different  states  and 
between  citizens  and  aliens. 

Two  things  however,  have  contributed  to  the  adop¬ 
tion  of  the  popular  view  that  Congress  has  not  the 
same  power  of  legislation  in  these  classes  of  cases 
as  in  admiralty  cases.  One  is  the  fact  that  Congress 
has  made  the  admiralty  jurisdiction  exclusive,  while 
it  has  provided  that  the  jurisdiction  of  the  United 
States  courts  in  these  other  controversies  shall  be 
concurrent  with  that  of  the  state  courts,  subject  merely 
to  the  provisions  of  law  as  to  the  removal  to  the  United 
States  courts  of  certain  cases  of  this  sort  originating 
in  the  state  courts.  The  other  is  that,  partly  as  a  result 
of  the  exclusiveness  of  the  jurisdiction  of  the  ad¬ 
miralty  courts  of  the  United  States,  those  courts 
have  developed  their  own  law,  subject  to  the  action 
of  Congress  and  state  legislatures,  while  in  the  case 
of  controversies  between  citizens  of  different  states 
the  United  States  courts  have  generally  followed 
the  injunction  of  Congress  to  regard  the  laws  of  the 
several  states  as  the  rules  of  decisions  in  all  trials  of 
common  law. 


170  SOCIAL  REFORM  AND  THE  CONSTITUTION 


But,  as  has  been  pointed  out,  Congress  may  make 
the  entire  jurisdiction  of  the  United  States  courts 
exclusive  if  it  sees  fit  so  to  do,  and  the  adoption 
by  the  United  States  courts  of  the  laws  of  the 
several  states  as  rules  of  decision  in  trials  at  common 
law  is  due  to  a  provision  to  that  effect  in  an  act  of 
Congress,  and  not  to  any  provision  of  the  constitu¬ 
tion.  It  has  already  been  noted  that  in  matters  of 
equity,  in  which  the  federal  courts  have  not  been 
obliged  by  the  provisions  of  the  Judiciary  Act  to 
regard  the  laws  of  the  several  states  as  rules  of 
decision,  these  courts  have,  in  the  exercise  of  powers 
granted  by  Congress,  developed  rules  of  their  own; 
and  that  in  so  far  as  Congress  has  legislated  regarding 
the  equitable  jurisdiction  of  these  courts,  they  have 
felt  obliged  to  apply  such  acts  of  Congress  rather 
than  the  laws  of  the  states. 

Finally,  it  is  to  be  noted  that,  notwithstanding  the 
provision  of  Congress  that  the  laws  of  the  several 
states  shall  be  regarded  as  rules  of  decision  in  the 
federal  courts  in  trials  at  common  law  where  they 
apply,  an  important  part  of  the  law  administered 
by  the  United  States  courts  in  dealing  with  contro¬ 
versies  between  citizens  of  different  states  is  different 
from  the  law  administered  by  the  courts  of  the  states. 
This  difference  is  noticeable  not  only  in  the  system 
of  remedies  which  are  applicable,  but  also  in  the  rules 
of  law  which  are  to  be  applied  in  the  case  of  particular 
legal  relations,  or,  in  other  words,  in  what  are  often 
called  the  rules  of  substantive  law. 

Congress  has  provided  that  forms  and  modes  of 
proceeding  in  equity  and  admiralty  suits  shall  be 
according  to  the  practice  of  courts  of  equity  and 


PRIVATE  LAW 


171 

admiralty,1  and  that  the  practice,  pleadings,  and  forms 
and  modes  of  proceedings  in  other  civil  causes  shall 
conform  as  near  as  may  be  to  the  proceedings  of  the 
state  within  which  the  federal  court  sits.2  But  the 
courts  have  recognized  the  right  of  Congress  to  regu¬ 
late  any  matter  of  procedure  in  the  United  States 
courts,3  and  Congress  has  in  specific  instances  not 
given  to  the  federal  courts  the  right  to  make  use  of 
certain  remedies,  such  as  mandamus,  certiorari,  or 
injunction,  of  which  the  state  courts  make  use.4 
Congress  has  also  legislated  with  regard  to  the  com¬ 
petency  of  witnesses  and]  with  regard  to  evidence 
in  actions  brought  in  the  United  States  courts ; 
and  these  courts  have  held,  time  and  time  again, 
that  they  are  bound  by  the  acts  of  Congress,  even 
where  such  acts  are  in  conflict  with  the  laws  of  the 
states.5 

These  are  some  of  the  cases  in  which  Congress  has 
by  legislation  determined  the  system  of  remedies 
which  shall  be  applied  in  the  United  States  courts. 
To  sum  up  on  this  point,  it  may  be  said,  that  partly 
as  a  result  of  judicial  decision  and  partly  as  a  result  of 
Congressional  legislation,  the  whole  system  of  equity 
jurisprudence  of  the  United  States  is  independent  of 
that  of  the  states ;  that  in  a  number  of  cases  the  com¬ 
mon  law  remedies  are  likewise  independent ;  and  that 


1  Revised  Statutes,  Sec.  913. 

2  Ibid.,  Sec.  914. 

*  Southern  Pacific  Co.  v.  Denton,  146  U.  S.  202,  209. 

4  Mclntire  v.  Wood,  7  Cranch,  504 ;  Ex  parte  Van  Orden,  3  Blatch- 
ford,  166;  Snyder  v.  Marks,  109  U.  S.  189.  See  also  Cary  v.  Curtis, 

3  Howard,  236. 

6  King  v.  Worthington,  104  U.  S.  44;  Ex  parte  Fiske,  113  U.  S. 

713,  721;  Whitford  v.  Clark  Company,  119  U.  S.  522. 


172  SOCIAL  REFORM  AND  THE  CONSTITUTION 


Congress  has,  with  the  approval  of  the  Supreme  Court, 
claimed  and  exercised  the  right  to  determine,  often  in 
opposition  to  the  positive  law  of  particular  states, 
the  law  to  be  applied  in  the  United  States  courts  as 
regards  the  competency  of  witnesses  and  evidence 
in  general. 

While  the  decisions  immediately  above  cited  deal 
with  the  remedies  applicable  in  the  federal  courts, 
some  of  them,  rendered  in  cases  of  an  equitable  char¬ 
acter,  seem  to  recognize  that  either  the  federal  judi¬ 
ciary  or  Congress  has  the  right  to  determine  the  rules 
of  substantive  law  to  be  administered  in  the  equity 
courts  of  the  United  States. 

When  we  come  to  consider  more  particularly  the 
rules  of  substantive  law  which  may  be  applied  in  the 
federal  courts  in  trials  at  common  law,  we  find  that 
while  Congress  has  seldom  if  ever  taken  any  action 
as  to  the  law  to  be  applied  in  controversies  where 
the  jurisdiction  of  the  federal  courts  results  merely 
from  the  character  of  the  parties,  the  federal  courts 
themselves,  in  the  exercise  of  their  constitutional 
jurisdiction,  have  limited  very  seriously  the  applica¬ 
tion  of  the  rule  laid  down  in  the  Judiciary  Act,  which 
provides  that  the  laws  of  the  several  states  shall  be 
regarded  as  rules  of  decision  in  trials  at  common  law 
in  the  courts  of  the  United  States. 

In  Swift  v.  Tyson,1  decided  in  1842,  the  Supreme 
Court  was  called  upon  to  consider  whether  a  federal 
court,  having  jurisdiction  as  a  result  of  diversity  of 
citizenship,  was  obliged  by  the  thirty-fourth  section  of 
the  Judiciary  Act  (now  Section  721  of  the  Revised 
Statutes)  to  follow  the  decisions  of  a  state  court  that 

1  16  Peters,  1,  18. 


PRIVATE  LAW 


173 


a  preexisting  debt  was  not  a  valuable  consideration 
for  a  negotiable  instrument.  Justice  Story  said :  — 

“That  section  provides:  ‘that  the  laws  of  the  several 
states,  except  where  the  constitution,  treaties,  or  statutes  of 
the  United  States  shall  otherwise  require  or  provide,  shall 
be  regarded  as  rules  of  decision  in  trials  at  common  law 
in  the  courts  of  the  United  States  in  cases  where  they 
apply.’  In  order  to  maintain  the  argument  [that  the  United 
States  courts  are  bound  by  the  decisions  of  the  state  courts] 
it  is  essential  therefore  to  hold  that  the  word  Taws’  in  this  sec¬ 
tion  includes  within  the  scope  of  its  meaning  the  decisions  of  the 
local  tribunals.  In  the  ordinary  use  of  language  it  will  hardly 
be  contended  that  the  decisions  of  courts  constitute  laws.  They 
are,  at  most,  only  evidence  of  what  laws  are,  and  are  not  of  them¬ 
selves  laws.  They  are  often  reexamined,  reversed,  and  qualified 
by  the  courts  themselves  whenever  they  are  found  to  be  either 
defective  or  ill  founded  or  otherwise  incorrect.  The  laws  of  a 
state  are  more  usually  understood  to  mean  the  rules  and  enact¬ 
ments  promulgated  by  the  legislative  authority  thereof  or  long- 
established  local  customs  having  the  force  of  laws.  In  all  the 
various  cases  which  have  hitherto  come  before  us  for  decision 
this  court  have  uniformly  supposed  that  the  true  interpretation 
of  the  thirty-fourth  section  limited  its  application  to  state  laws 
strictly  local;  that  is  to  say,  to  the  positive  statutes  of  the  state 
and  the  construction  thereof  adopted  by  the  local  tribunals, 
and  to  rights  and  titles  to  things  having  a  permanent  locality, 
such  as  the  rights  and  titles  to  real  estate  and  other  matters 
immovable  and  intraterritorial  in  their  nature  and  character. 
It  never  has  been  supposed  by  us  that  the  section  did  apply  or 
was  designed  to  apply  to  questions  of  a  more  general  nature,  not 
at  all  dependent  upon  local  statutes  or  local  usages  of  a  fixed  and 
permanent  operation,  as,  for  example,  to  the  construction  of  ordi¬ 
nary  contracts  or  other  written  instruments  and  especially  to 
questions  of  general  commercial  law,  where  the  state  tribunals 
are  called  upon  to  perform  the  like  functions  as  ourselves;  that 
is,  to  ascertain  upon  general  reasoning  and  legal  analogies  what 
is  the  just  rule  furnished  by  the  principles  of  commercial  law  to 
govern  the  case.  And  we  have  not  now  the  slightest  difficulty 


174  SOCIAL  REFORM  AND  THE  CONSTITUTION 


in  holding  that  this  section,  upon  its  true  intendment  and  con¬ 
struction,  is  strictly  limited  to  local  statutes  and  local  usages  of 
the  character  before  stated,  and  does  not  extend  to  contracts  and 
other  instruments  of  a  commercial  nature,  the  true  interpretation 
and  effect  whereof  are  to  be  sought,  not  in  the  decisions  of  the 
local  tribunals,  but  in  the  general  principles  and  doctrines  of 
commercial  jurisprudence.” 

The  Supreme  Court  therefore  held  that  it  would  not 
follow  the  decisions  of  the  New  York  courts. 

In  the  application  of  this  theory  the  federal  courts 
have  determined  for  themselves  what  is  the  law,  not 
only  with  regard  to  negotiable  paper,  but  also  with 
regard  to  the  liabilities  of  carriers.1  And  since  the 
decision  of  Swift  v.  Tyson,  the  doctrine  that  the 
federal  courts  are  not  obliged  to  regard  the  decisions 
of  the  courts  of  the  several  states  as  rules  of  decision 
in  matters  of  general  commercial  law  has  been  ex¬ 
tended  in  two  ways. 

In  the  first  place,  the  same  general  principle  has  been 
applied  in  other  branches  of  the  law,  for  example,  in 
the  law  of  master  and  servant.  In  Baltimore  and  Ohio 
Railroad  v.  Baugh  2  the  Supreme  Court  decided  that 
it  would  determine  for  itself,  irrespective  of  the  deci¬ 
sions  of  the  Ohio  courts,  what  was  the  extent  of  the 
application  of  the  rule  that  a  servant  could  not  re¬ 
cover  from  the  master  where  the  negligence  causing 
the  damage  was  that  of  a  co-servant. 

In  the  second  place,  the  Supreme  Court  has  held 
that  in  determining  the  rules  of  law  affecting  com¬ 
mercial  paper  it  will  disregard  even  a  statute  which 

1  Myrick  v.  Michigan  Central  Railway  Company,  107  U.  S.  102 ; 
Lake  Shore,  etc.,  Railroad  Company  v.  Prentice,  147  U.  S.  101 ;  N.  Y. 
Central  Railroad  Company  v.  Lockwood,  17  Wallace,  357. 

2 149  U.  S.  368. 


PRIVATE  LAW 


*75 


it  considers  to  be  opposed  to  the  rules  of  the  general 
commercial  law.  In  the  case  of  Watson  v.  Tarpley 
the  court  said :  — 

“Whilst  it  will  not  be  denied,  that  the  laws  of  the  several 
states  are  of  binding  authority  upon  their  domestic  tribunals, 
and  upon  persons  and  property  within  their  appropriate  juris¬ 
diction,  it  is  equally  clear  that  those  laws  cannot  affect,  either  by 
enlargement  or  diminution,  the  jurisdiction  of  the  courts  of  the 
United  States  as  vested  and  prescribed  by  the  constitution  and 
laws  of  the  United  States,  nor  destroy  or  control  the  rights  of 
parties  litigant  to  whom  the  right  of  resort  to  these  courts  has 
been  secured  by  the  laws  and  constitution.  This  is  a  position 
which  has  been  frequently  affirmed  by  this  court,  and  would 
seem  to  compel  the  general  assent  upon  its  simple  enunciation. 
.  .  .  The  general  commercial  law  being  circumscribed  within 
no  local  limits,  nor  committed  for  its  administration  to  any  pe¬ 
culiar  jurisdiction,  and  the  constitution  and  laws  of  the  United 
States  having  conferred  upon  the  citizens  of  the  several  states, 
and  upon  aliens,  the  power  or  privilege  of  litigating  and  enforcing 
their  rights  acquired  under  and  defined  by  that  general  com¬ 
mercial  law,  before  the  judicial  tribunals  of  the  United  States,  it 
must  follow,  by  regular  consequence,  that  any  state  law  or  regu¬ 
lation,  the  effect  of  which  would  be  to  impair  the  rights  thus  se¬ 
cured,  or  to  divest  the  federal  courts  of  cognizance  thereof, 
in  their  fullest  acceptation  under  the  commercial  law,  must  be 
nugatory  and  unavailing.”  1 

1  1 8  Howard,  517,  at  pp.  520,  521.  See,  however,  Phipps  v. 
Harding,  34  U.  S.  Appeals,  148,  which  holds  that  the  federal  courts  are 
bound  by  state  statutes  with  regard  to  the  substantive  commercial 
law,  and  distinguishes  (at  p.  159)  this  decision  from  that  rendered 
in  Watson  v.  Tarpley  on  the  ground  that  the  statute  there  disregarded 
affected  the  remedy  only.  See  also  Equitable  Trust  Company  v. 
Fowler,  141  U.  S.  384,  which,  without  argument,  holds  that  state 
legislation  controls  the  federal  courts  in  determining  what  local  law 
governs  the  validity  of  a  contract  alleged  to  be  usurious.  In  Burgess 
v.  Seligman,  107  U.  S.  20,  the  Supreme  Court  refused  to  follow  in 
the  construction  of  a  state  statute  the  decision  of  a  state  court,  ren¬ 
dered  subsequently  to  the  decision  of  the  case  in  the  lower  federal 
court.  Here  the  question  at  issue  was  whether  the  voting  by  the 


Ij6  SOCIAL  REFORM  AND  THE  CONSTITUTION 


The  adoption  by  the  Supreme  Court  of  the  doctrine 
of  estoppel  by  recital  in  the  case  of  municipal  bonds 
in  the  hands  of  bona  fide  holders’ is  an  example  of  the 
extent  to  which  the  federal  courts  have  claimed  power 
to  determine,  independently  of  the  decisions  of  the 
state  courts  made  even  in  construing  state  statutes, 
the  law  applicable  to  cases  of  a  commercial  character 
coming  before  them  as  a  result  of  diversity  of  citizen¬ 
ship. 

Thus,  in  Town  of  Venice  v.  Murdock  1  the  court 
refused  to  follow  the  interpretation  given  by  the  New 
York  Court  of  Appeals  to  a  state  statute  authorizing 
a  town  under  certain  conditions  to  issue  bonds.  The 
Court  of  Appeals  had  held  that  under  a  statute  pro¬ 
viding  for  the  filing  by  town  officers  of  a  certificate 
that  the  conditions  precedent  to  the  issue  of  bonds 
had  been  complied  with,  such  certificate  was  not 
evidence  of  compliance  with  statutory  conditions, 
but  that  the  plaintiff  must  prove  that  the  conditions 
had  actually  been  complied  with;  and  furthermore, 
that  the  town  issuing  the  bonds  was  not  estopped  by 
recitals  in  such  bonds  to  the  effect  that  the  law  had 
been  complied  with  from  showing  that  as  a  matter  of 
fact  the  law  had  not  been  complied  with.  Neverthe¬ 
less,  the  Supreme  Court  refused  to  adopt  the  rule  of 
the  Court  of  Appeals  and  held  that  the  lower  court 
did  not  err  in  holding  that,  in  view  of  the  existence  of 
such  certificate  and  recitals,  no  such  actual  compliance 
need  be  proved.  The  court  did  not,  however,  regard 
the  New  York  decisions  as  made  in  construction  of  the 

pledgee  of  stock  held  as  security  for  a  loan  estopped  such  pledgee  from 
showing,  in  a  suit  against  him  as  owner,  that  he  was  not  the  owner, 
but  the  pledgee.  1  92  U.  S.  494. 


PRIVATE  LAW 


177 


state  statute,  but  as  an  expression  of  a  general  rule  of 
law. 

In  a  decision  made  subsequent  to  the  decision  in 
Town  of  Venice  v.  Murdock,  the  New  York  Court  of 
Appeals  held  that  even  a  statute  providing  that  an 
official  certificate  of  compliance  with  the  law  “  shall 
be  evidence  of  the  facts  therein  contained”  did  not 
make  the  certificate  “  conclusive  evidence.  It  is 
satisfied  by  holding  that  it  is  competent  or  prima 
facie  evidence.”  1 

In  Craig  v.  Andes  2  the  certificate  provided  by  law 
was  a  determination  made  by  the  county  judge,  who 
was  by  the  statute  to  “adjudge  and  determine”  that 
a  majority  of  the  taxpayers  had  petitioned  for  the 
issue  of  bonds.  This  determination  was  to  be  recorded 
and  was  to  have  the  “same  force  and  effect  as  other 
judgments  and  records  in  courts  of  record  in  this  state.” 
The  Court  of  Appeals  held  both  that  the  certificate 
of  the  county  judge  that  a  majority  of  the  taxpayers 
had  consented  to  the  issue  of  the  bonds  could  be  im¬ 
peached  by  the  town  in  an  action  against  it  on  the 
bonds,  and  that  the  town  when  sued  on  the  bonds  was 
not  estopped  by  recitals  in  the  bonds,  to  the  effect  that 
certain  acts  authorized  their  issue  by  the  town  “all 
necessary  and  legal  proceedings  having  been  taken 
and  had  under  said  acts,”  from  showing  that  as  a 
matter  of  fact  the  bonds  were  illegally  issued.  The 
New  York  court  in  making  this  decision  certainly 
believed  that  it  was  construing  the  state  statute  as 

1  Cagwin  v.  Town  of  Hancock,  84  N.  Y.  532.  In  the  opinion  in  this 
case  the  court  says:  “There  are  undoubtedly  decisions  of  the  federal 
courts  holding  in  favor  of  bona  fide  holders  a  different  doctrine,  but 
those  decisions  have  not  been  regarded  as  controlling  authority  in 
this  court.”  2  93  N.  Y.  405. 

N 


178  SOCIAL  REFORM  AND  THE  CONSTITUTION 


to  the  effect  of  the  determination  provided  by  such 
statute.  But  the  Supreme  Court  of  the  United 
States  refused  to  follow  the  decision  of  the  state 
court,  and  held  on  the  authority  of  Orleans  v.  Platt 1 
and  Lyons  v.  Munson2  first,  that  the  determination 
of  the  county  judge  was  conclusive;  and  second, 
that  the  town  was  estopped  by  the  recitals  from 
showing  the  illegality  of  the  bonds  in  the  hands  of 
a  bona  fide  holder.3 

In  the  more  recent  cases  the  Supreme  Court  has 
carried  this  doctrine  of  estoppel  by  recital  so  far  as  to 
make  it  applicable  under  certain  conditions  to  recitals 
that  an  issue  of  bonds  is  not  in  excess  of  the  consti¬ 
tutional  or  statutory  limit  of  indebtedness.4  It  has 
little  hesitation  in  holding  that  a  public  corporation 
is  estopped  by  such  a  recital  from  alleging,  in  a  suit 
on  the  bonds  by  a  bona  fide  holder,  that  the  bonds  were 
issued  in  excess  of  the  legal  limit.  In  answer  to  the 
objection  that  by  adopting  such  a  rule  they  are  not  ap¬ 
plying  the  laws  of  the  state,  the  United  States  courts 
say  that  the  question  “is  not  one  of  the  construction 
of  the  constitution  or  statutes  of’7  a  state. 

1 99  U.  S.  676.  2  Ibid.,  684. 

3  The  court  disposes  of  Craig  v.  Town  of  Andes  by  calling  it  a  col¬ 
lusive  suit,  as  it  was  said  to  be  by  the  Court  of  Appeals  in  Calhoun 
v .  Millard  (121  N.  Y.  59),  where  it  was  sought  to  cancel  these  bonds. 
But  it  is  to  be  noticed  that  the  Court  of  Appeals  did  not  overrule 
Craig  v.  Andes,  but  distinctly  places  its  decision  in  Calhoun  v.  Millard 
on  the  general  equitable  ground  that  a  court  of  equity  may  “refuse 
to  exercise  its  jurisdiction  and  leave  the  party  to  his  defense  at  law 
when  the  instrument  is  sought  to  be  enforced  against  him.”  The 
Supreme  Court  did,  it  is  true,  go  into  the  merits  of  the  objections  of 
the  New  York  Court  of  Appeals  to  the  legality  of  the  bonds  which  it 
did  not  sustain. 

4  See  e.g.  Gunnison  County  Court  v.  Rollins,  173  U.  S.  255,  and 
cases  cited. 


PRIVATE  LAW 


179 


“It  simply  involves  the  construction  and  effect  of  recitals  in 
negotiable  instruments.  It  is  a  question  of  commercial  and  not 
of  constitutional  law,  upon  which  the  decisions  of  the  state  courts 
are  not  controlling  in  the  federal  tribunals.  It  is  not  only  the 
privilege  but  the  duty  of  the  federal  courts  imposed  upon  them 
by  the  constitution  and  statutes  of  the  United  States,  to  con¬ 
sider  for  themselves,  and  to  form  their  independent  opinions  and 
decisions  upon  questions  of  commercial  or  general  law  pre¬ 
sented  in  cases  in  which  they  have  jurisdiction,  and  it  is  a  duty 
which  they  cannot  justly  renounce  or  disregard.  Jurisdiction  of 
such  cases  was  conferred  upon  them  for  the  express  purpose  of 
securing  their  independent  opinions  upon  the  questions  arising 
in  the  litigation  remitted  to  them.  And  a  citizen  of  the  United 
States  who  has  the  right  to  prosecute  his  suit  in  the  national 
courts  has  also  the  right  to  the  opinions  and  decisions  of  those 
courts  upon  every  crucial  question  of  general  or  commercial  law 
or  of  right  under  the  constitution  or  statutes  of  the  nation  which 
he  presents.”  1 

In  another  case,  the  Supreme  Court  says:  — 

“it  is  entirely  competent  for  a  state  to  provide  by  statute  that 
all  obligations  in  whatever  form  executed  by  a  municipality  under 
its  existing  laws  shall  be  subject  to  any  defense  that  would  be 
allowed  in  cases  of  nonnegotiable  instruments.  But  for  reasons 
that  every  one  understands,  no  such  statutes  are  passed.  Munic¬ 
ipal  obligations  executed  under  such  a  statute  could  not  be 
readily  disposed  of  to  those  who  invest  in  such  securities.” 2 

At  the  same  time,  as  all  of  those  estoppel  by  recital 
cases  are  based  upon  the  fundamental  proposition 
“that  the  corporate  officers  had  authority  by  law  to 
determine  and  certify”  as  to  the  matters  of  fact  con¬ 
tained  in  the  recitals  3  and  as  the  Supreme  Court  gives 
to  such  determination  when  recited  in  the  bond  the 

1  Independent  School  District  of  Sioux  City  v.  Rew,  in  Fed. 
Rep.  1. 

2  Waite  v.  Santa  Cruz,  184  U.  S.  302,  319. 

3  Dixon  County  v.  Field,  in  U.  S.  92-94. 


180  SOCIAL  REFORM  AND  THE  CONSTITUTION 


effect  of  conclusive  evidence  of  the  truth  of  the  facts 
determined  and  recited,  whatever  may  be  the  effect 
given  to  it  by  the  state  courts  construing  the  statute, 
it  may  be  said  that  the  United  States  courts  do  not, 
in  these  estoppel  by  recital  cases,  follow  the  decisions 
of  state  courts  interpreting  the  effect  of  state  statutes 
giving  power  to  municipal  officers. 

No  attempt  has  been  made  to  give  an  exhaustive 
enumeration  of  the  cases  in  which  the  federal  courts 
have  so  construed  Section  721  of  the  Revised  Statutes 
of  the  United  States  as  to  permit  them,  even  in  com¬ 
mon  law  cases,  to  act  independently  of  the  laws  of  the 
several  states  in  the  determination  of  the  law  appli¬ 
cable  to  the  cases  before  them ;  but  enough  has  been 
said,  it  is  hoped,  to  show  that  the  federal  courts  have 
considerable  independence  in  determining  what  law  is 
to  be  applied  in  these  cases  and,  if  need  be,  may  work 
out  the  law  without  regard  to  the  decisions  of  the 
state  courts.1  This  being  the  case,  it  cannot  well  be 
doubted  that  Congress  itself  has  the  power  to  change 
the  law  laid  down  by  the  federal  courts.  For,  as  Mr. 
Justice  Bradley  said  in  The  Lottawanna,2  in  asserting 


1  See  an  interesting  article  in  the  Northwestern  Law  Review  for 
1894,  entitled,  “Is  there  a  Federal  Common  Law”  in  which  the  au¬ 
thor,  Mr.  Blewett  Lee,  says  that  the  decisions  of  the  federal  courts 
have  established  “a  general  uniform  commercial  law  prevalent  in 
the  United  States  courts  throughout  the  republic”  and  suggests  that 
“it  may  be  the  United  States  Congress  has  power,  if  it  chooses,  not 
only  to  make  a  commercial  code  for  the  regulation  of  interstate  and 
foreign  commerce,  but  to  make  a  civil  code  for  the  decision  of  all  cases 
in  its  courts  under  their  jurisdiction  as  conferred  by  Congress  under 
the  constitution.  The  latter  question  is  much  like  that  in  case  of 
admiralty,  where  the  courts  are  given  jurisdiction,  but  Congress  is 
given  no  express  power  to  enact  admiralty  law. 

2  21  Wallace,  558. 


PRIVATE  LAW 


181 


the  power  of  Congress  to  limit  the  liability  of  ship¬ 
owners  to  shippers :  — 

“We  must  always  remember  that  the  court  cannot 
make  the  law;  it  can  only  declare  it.  If  within  its 
proper  scope  any  change  is  desired  in  its  rules,  other 
than  those  of  procedure,  it  must  be  made  by  the  legis¬ 
lative  department.  It  cannot  be  supposed  that  the 
framers  of  the  constitution  contemplated  that  the 
law  should  forever  remain  unalterable.” 

In  this  case,  it  is  true,  Mr.  Justice  Bradley  derives 
the  power  of  Congress  to  fix  the  law  in  the  particular 
case  from  the  commerce  clause ;  but  in  the  later  case 
of  In  re  Garnett 1  he  as  distinctly  derives  the  power 
of  Congress  to  limit  the  liability  of  shipowners,  in 
the  case  of  shipments  of  goods  from  one  place  to  an¬ 
other  in  the  same  state,  from  the  judicial  article, 
saying :  — 

“It  is  unnecessary  to  invoke  the  power  given  to  Congress  to 
regulate  commerce  with  foreign  nations  and  among  the  several 
states  in  order  to  find  authority  to  pass  the  law  in  question. 
The  act  of  Congress  which  limits  the  liability  of  shipowners  was 
passed  in  amendment  of  the  maritime  law  of  the  country,  and 
the  power  to  make  such  amendments  is  coextensive  with  the 
law.  It  is  not  confined  to  the  boundaries  or  class  of  subjects 
which  limit  and  characterize  the  power  to  regulate  commerce, 
but  in  maritime  matters  it  extends  to  all  matters  and  places  to 
which  maritime  law  extends.” 2 

1  141  U.  S.  1. 

2  See  also  the  opinion  of  the  Supreme  Court  in  Butler  v.  Boston 
Steamship  Company,  130  U.  S.  527,  557,  where  it  is  said:  “As  the 
constitution  extends  the  judicial  power  of  the  United  States  to  ‘all 
cases  of  admiralty  and  maritime  jurisdiction,”  and  as  this  jurisdic¬ 
tion  is  held  to  be  exclusive,  the  power  of  legislation  on  the  same  sub¬ 
ject  must  be  in  the  national  legislature  and  not  in  the  state  legisla¬ 
tures.” 


1 82  SOCIAL  REFORM  AND  THE  CONSTITUTION 


It  will  be  remembered  that  the  admiralty  jurisdic¬ 
tion  is  exclusive  not  because  the  constitution,  but 
because  Congress,  has  made  it  so,  and  that  Congress 
could  similarly  make  the  jurisdiction  of  the  federal 
courts  resulting  from  diversity  of  citizenship  exclusive 
instead  of  concurrent  with  that  of  the  state  courts, 
as  it  now  is. 

The  argument  of  the  Supreme  Court  in  support  of 
the  contention  that  Congress  has  legislative  power 
with  regard  to  the  admiralty  law  is  based,  it  will  be 
noticed,  upon  the  proposition  that  there  is  a  common 
law  of  admiralty  which  the  courts  having  admiralty 
jurisdiction  will  apply,  but  that  that  law  may  be  changed 
through  the  action  of  the  competent  legislative  au¬ 
thority.  This  authority,  we  have  seen,  is  the  Congress 
of  the  United  States,  which,  however,  through  the 
reservation  of  the  common  law  remedy,  where  that  is 
competent,  has  delegated  to  the  state  legislatures  the 
right  to  legislate  upon  the  substantive  admiralty  law, 
provided  such  legislation  is  not  in  conflict  with  the 
legislation  of  Congress.  It  follows,  therefore,  that  if 
there  is  a  federal  common  law  which  the  United  States 
may  apply  in  the  cases  subject  to  their  jurisdiction, 
that  law  may  be  changed  by  Congress  either  by  acting 
directly  itself  or  by  delegating  the  power  to  act  to  the 
state  legislatures.  Congress  did  delegate  this  power 
to  the  state  legislatures  by  Section  34  of  the  Judiciary 
Act  of  1789,  which  provided  that  the  laws  of  the 
several  states  should  be  regarded  as  rules  of  decision 
in  trials  at  common  law  in  the  United  States  courts 
where  they  apply.  This  provision  has  been  inter¬ 
preted,  as  has  been  shown,  as  generally  obliging  the 
United  States  courts  to  apply  state  statutes,  but  as 


PRIVATE  LAW 


I^3 

leaving  those  courts  pretty  wide  freedom  as  to  follow¬ 
ing  the  decisions  of  state  courts  in  other  than  local 
matters. 

There  have  been  two  opinions  advanced  both  by 
the  Supreme  Court  itself  and  by  the  writers  upon  the 
constitution  as  to  what  law  the  United  States  courts 
apply  when,  in  cases  coming  before  them  as  a  result 
of  diversity  of  citizenship,  they  refuse  to  follow  the 
decisions  of  state  courts.  One  is  that  they  are  apply¬ 
ing  principles  of  “ general  law,” 1  or  “the  general  prin¬ 
ciples  and  doctrines  of  commercial  jurisprudence.”  2 
The  other  is  that  there  is  no  federal  common  law, 
and  that  the  United  States  courts  are  really  applying 
the  common  law  of  one  of  the  several  states,  and 
that  the  highest  state  courts  either  do  not  know  the 
law  of  the  state  or  have  made  a  mistake  with  regard 
to  it.3 

The  conception  that  the  courts  of  the  United  States 
always  apply  state  law  in  these  cases  does  not  involve 
a  denial,  it  will  be  noticed,  to  those  courts  of  an  in¬ 
dependent  power  of  determining  what  the  state  law  is, 
but  is  based  upon  the  rather  absurd  proposition  that  the 
highest  state  courts  are,  as  compared  with  the  United 
States  courts,  deficient  in  either  legal  knowledge  or 
acumen  and  do  not  know  the  law  of  the  state,  whose 
judicial  power  is  by  the  state  constitution  vested  in 
them.  This  conception  is  therefore  based  upon  a 
false  idea  of  the  judicial  supremacy  of  the  state  courts 
and  a  fanciful  explanation  of  an  undoubted  fact,  viz. 
that  the  United  States  courts  have  in  the  absence 

1  See  e.g.  Baltimore  &  Ohio  Ry.  Co.  v.  Baugh,  149  U.  S.  92. 

2  See  e.g.  Swift  v.  Tyson,  16  Peters,  1. 

*  See  e.g.  Smith  v.  Alabama,  124  U.  S.  465. 


1 84  SOCIAL  REFORM  AND  THE  CONSTITUTION 


of  statute  an  independent  power  of  determining  the 
law  which  they  will  apply  in  cases  coming  before  them. 
It  has  furthermore  been  adopted  simply  for  the  pur¬ 
pose  of  denying  the  existence  of  a  federal  common 
law,  which,  as  a  matter  of  fact,  does  for  all  practical 
purposes  exist,  and  naturally  has  for  its  effect  the 
further  denial  of  the  right  of  Congress  or  the  federal 
courts  to  determine  that  the  law  to  be  applied  by 
those  courts  need  not  be  the  law  of  the  state, 
although  Congress,  when  it  passed  the  Judiciary 
Act,  expressly  provided  that  the  laws  of  the  states 
should  be  regarded  as  rules  of  decisions  only  where 
it  was  not  otherwise  provided  by  the  laws  of  the 
United  States. 

While  the  action  of  Congress  in  providing  that  the 
laws  of  the  states  shall  be  regarded  where  not  other¬ 
wise  provided  as  rules  of  decision  in  the  United  States 
courts,  has  necessarily  obscured  the  matter,  since 
the  United  States  courts  have,  because  of  the  action 
of  Congress,  very  commonly  applied  the  state  law, 
it  cannot  be  said  that  it  has  been  judicially  determined 
that  there  is  no  federal  common  law.  Indeed,  it  has 
been  actually  held  that,  in  cases  arising  under  the  con¬ 
stitution  and  laws  of  the  United  States,  there  is  a 
federal  common  law.1 

Furthermore,  an  examination  of  English  judicial 
history  will  show  that  the  courts  of  England,  whether 
those  of  general  jurisdiction  like  the  common  law  and 
equity  courts,  or  those  of  special  jurisdiction  such  as 
the  ecclesiastical,  admiralty,  piepowder,  or  staple 
courts,  always  acted  as  if  they  considered  that  it  was 

1  Murray  v.  C.  &.  N.  W.  R.  Co.,  62  Fed.  24,  approved  in  Western 
Union  Tel.  Co.  v.  Call  Pub.  Co.,  181  U.  S.  92,  103,  and  cases  cited. 


PRIVATE  LAW  1 85 

an  incident  of  their  jurisdiction  to  determine  the 
substantive  law  which  they  were  to  apply  in  cases 
before  them,  where  that  law  had  not  been  fixed  by 
the  competent  legislative  authority. 

This  being  the  case,  the  question  naturally  arises 
as  to  whether  the  framers  of  the  United  States  con¬ 
stitution  did  not  expect  that  the  courts  for  which  provi¬ 
sion  was  made  in  that  instrument  would  exercise  such 
a  power.  It  is  difficult  to  answer  this  question.  An 
examination  of  the  debates  on  the  constitution  as 
reported  in  Eliot’s  “ Debates”  would  seem  to  show 
that  in  the  National  Convention  the  judicial  article  of 
the  constitution  aroused  little  comment,  and  that  the 
question  —  what  law  would  be  administered  by  the 
federal  courts  —  was  hardly  raised.  The  question 
was,  however,  raised  in  some  of  the  state  conventions, 
and  several  of  the  speakers  evidently  expected  that 
the  establishment  of  United  States  courts  would  have 
for  its  effect  the  gradual  development  of  a  uniform 
law.  Thus,  in  the  convention  of  North  Carolina,  Mr. 
Iredell  said :  — 

“The  propriety  of  having  a  Supreme  Court  in  every  govern¬ 
ment  must  be  obvious  to  every  man  of  reflection.  There  can  be 
no  other  way  of  securing  the  administration  of  justice  uniformly 
in  the  several  states.  There  might  be,  otherwise,  as  many 
different  jurisdictions  as  there  are  states.  It  is  to  be  hoped 
that,  if  this  government  be  established,  connections  still  more 
intimate  than  the  present  will  subsist  between  the  different 
states.  The  same  measure  of  justice,  therefore,  as  to  the  objects 
of  their  common  concern,  ought  to  prevail  in  all.  A  man  in 
North  Carolina,  for  example,  if  he  owed  £100  here  and  was  com¬ 
pellable  to  pay  it  in  good  money,  ought  to  have  the  means  of 
recovering  the  same  sum  if  due  to  him  in  Rhode  Island  and  not 
merely  the  nominal  sum  at  about  an  eighth  or  tenth  part  of  its 


1 86  SOCIAL  REFORM  AND  THE  CONSTITUTION 


intrinsic  value.  To  obviate  such  a  grievance  as  this,  the  consti¬ 
tution  has  provided  a  tribunal  to  administer  equal  justice  to 
all.”  1 

In  the  same  convention  Mr.  Davie  said:  — 

“The  people  of  the  United  States  have  one  common  interest ; 
they  are  all  members  of  the  same  community,  and  ought  to  have 
justice  administered  to  them  equally  in  every  part  of  the  con¬ 
tinent,  in  the  same  manner,  with  the  same  dispatch,  and  on  the 
same  principles.  It  is  therefore  absolutely  necessary  that  the 
judiciary  of  the  Union  should  have  jurisdiction  in  all  cases 
arising  in  law  and  equity  under  the  constitution.  .  .  .  The 
security  of  impartiality  is  the  principal  reason  for  giving  the 
ultimate  decision  of  controversies  between  citizens  of  different 
states.  It  is  essential  to  the  interest  of  agriculture  and  com¬ 
merce  that  the  hands  of  the  states  should  be  bound  from 
making  paper  money,  instalment  laws,  or  pine  barren  acts.  By 
such  iniquitous  laws  the  merchant  or  farmer  may  be  defrauded  of 
a  considerable  part  of  his  just  claims.  But  in  a  federal  court, 
real  money  will  be  recovered  with  that  speed  which  is  necessary 
to  accommodate  the  circumstances  of  individuals.  The  tedious 
delays  of  judicial  proceedings,  at  present,  in  some  states,  are 
ruinous  to  creditors.  In  Virginia  many  suits  are  for  twenty  or 
thirty  years  spun  out  by  legal  ingenuity  and  the  defective  con¬ 
struction  of  their  judiciary.  A  citizen  of  Massachusetts  or 
this  country  might  be  ruined  before  he  could  recover  a  debt 
in  that  state.  It  is  necessary,  therefore,  in  order  to  obtain  jus¬ 
tice,  that  we  recur  to  the  judiciary  of  the  United  States,  where 
justice  must  be  equally  administered,  and  where  a  debt  may  be 
recovered  from  the  citizen  of  one  state  as  soon  as  from  the  citizen 
of  another.”  2 

In  the  South  Carolina  convention  Mr.  Pinckney 
is  reported  to  have  said  in  reference  to  the  federal 
judiciary  that  “from  the  extensiveness  of  its  powers, 
it  may  be  easily  seen,  that  under  a  wise  management, 

1  Eliot,  “The  Debates  in  the  Several  State  Conventions,”  etc., 
Philadelphia,  1876,  Vol.  IV,  p.  147.  2  Ibid.,  157  et  seq. 


PRIVATE  LAW 


187 


the  department  might  be  made  the  keystone  of  the  arch, 
the  means  of  connecting  and  binding  the  whole  to¬ 
gether,  of  preserving  uniformity  in  all  the  judicial 
proceedings  of  the  Union.”1 

In  the  convention  of  Pennsylvania,  Mr.  Wilson 
said,  in  speaking  of  the  clause  giving  the  United 
States  courts  jurisdiction  of  controversies  between 
citizens  and  aliens  and  between  citizens  of  different 
states :  — 

“Is  it  not  necessary,  if  we  mean  to  restore  either  public 
or  private  credit,  that  foreigners,  as  well  as  ourselves,  have  a  just 
and  impartial  tribunal  to  which  they  may  resort  ?  I  would  ask 
how  a  merchant  must  feel  to  have  his  property  lie  at  the  mercy  of 
the  laws  of  Rhode  Island.  I  ask,  further,  How  will  a  creditor 
feel  who  has  his  debts  at  the  mercy  of  tender  laws  in  other 
states  ?  It  is  true  that  under  this  constitution,  these  particular 
iniquities  may  be  restrained  in  future ;  but  sir,  there  are  other 
ways  of  avoiding  payment  of  debts.  There  have  been  install¬ 
ment  acts  and  other  acts  of  a  similar  effect.  Such  things,  sir, 
destroy  the  very  sources  of  credit. 

“Is  it  not  an  important  object  to  extend  our  manufactures  and 
our  commerce  ?  This  cannot  be  done,  unless  a  proper  security 
is  provided  for  the  regular  discharge  of  contracts.  This  cannot 
be  obtained,  unless  we  give  the  power  of  deciding  upon  those  con¬ 
tracts  to  the  general  government.  ...  At  present  how  are 
we  circumstanced  ?  Merchants  of  eminence  will  tell  you  that 
they  cannot  trust  their  property  to  the  laws  of  the  state  in  which 
their  correspondents  live.”  2 

The  opinions  which  have  been  quoted  were  ex¬ 
pressed  by  those  who  were  in  favor  of  the  adoption 
of  the  constitution.  But  much  stronger  statements 
as  to  the  probable  effect  of  that  instrument  were  made 
by  those  opposed  to  it.  Thus  in  the  Virginia  con¬ 
vention,  Mr.  Mason  said :  — 

2  Ibid. ,  Vol.  II,  492  et  seq. 


1  Ibid .,  p.  258. 


188  SOCIAL  REFORM  AND^  THE  CONSTITUTION 


“When  we  consider  the  nature  of  these  [federal]  courts  we 
must  conclude  that  their  effect  and  operation  will  be  utterly 
to  destroy  the  state  governments.  ...  To  those  who  think 
that  one  national  consolidated  government  is  best  for  America, 
this  extensive  judicial  authority  will  be  agreeable.”  1 

Mr.  Henry  added  his  protest  to  Mr.  Mason’s,  observ¬ 
ing  that  the 

“Jurisdiction  in  disputes  between  citizens  of  different  states 
will  be  productive  of  serious  inconveniences.  ...  I  beg  gentle¬ 
men  to  inform  me  of  this  —  in  what  courts  are  they  to  go,  and  by 
what  law  are  they  to  be  tried  ?  Is  it  by  a  law  of  Pennsylvania  or 
Virginia  ?  Those  judges  must  be  acquainted  with  all  the  laws  of 
the  different  states.  I  see  arising  out  of  that  paper  a  tribunal 
that  is  to  be  recurred  to  in  all  cases,  when  the  destruction  of  the 
state  judiciaries  shall  happen ;  and  from  the  extensive  jurisdic¬ 
tion  of  these  paramount  courts,  the  state  courts  must  soon  be 
annihilated.” 2 

To  this  John  Marshall,  afterwards  Chief  Justice  of  the 
Supreme  Court,  anticipating  the  opinion  he  expressed 
when  on  the  Supreme  Court,  answered  :  — 

“  In  the  court  of  which  state  will  it  [a  suit]  be  instituted  ?  said 
the  honorable  gentleman.  It  will  be  instituted  in  the  court  of 
the  state  where  the  defendant  resides,  where  the  law  can  get  at 
him,  and  nowhere  else.  By  the  laws  of  what  state  will  it  be  de¬ 
termined  ?  said  he.  By  the  laws  of  the  state  where  the  contract 
was  made.  According  to  those  laws  and  those  only,  can  it  be 
decided.  Is  this  a  novelty  ?  No ;  it  is  a  principle  in  the  juris¬ 
prudence  of  this  commonwealth.  If  a  man  contracted  a  debt  in 
the  East  Indies,  and  it  was  sued  for  here,  the  decision  must  be 
consonant  to  the  laws  of  that  country.  Suppose  a  contract 
made  in  Maryland  where  the  annual  interest  is  at  six  per  centum 
and  a  suit  instituted  for  it  in  Virginia ;  what  interest  would  be 
given  now,  without  any  federal  aid  ?  The  interest  of  Maryland 
most  certainly ;  and  if  the  contract  had  been  made  in  Virginia, 

1  Eliot,  “The  Debates  in  the  Several  State  Conventions,”  etc., 
Philadelphia,  1876,  Vol.  IV,  p.  521  et  seq.  2  Ibid.,  p.  542. 


PRIVATE  LAW 


189 


and  suit  brought  in  Maryland,  the  interest  of  Virginia  must  be 
given,  without  doubt.  It  is  now  to  be  governed  by  the  laws  of 
that  state  where  the  contract  was  made.  The  laws  which  gov¬ 
erned  the  contract  at  its  formation  govern  it  in  its  decision.”  1 

Our  examination  of  the  debates  on  the  constitution 
is  thus  somewhat  unsatisfactory  and  inconclusive,  as 
to  the  intentions  of  the  men  who  framed  or  adopted 
that  instrument.  It  can  hardly  be  said  that  they  had 
very  clear  ideas  as  to  what  was  the  function  which  the 
United  States  courts  would  discharge.  It  may,  how¬ 
ever,  be  said  that  many  of  them  evinced  a  great  dis¬ 
trust  of  the  state  courts  and  the  state  laws,  and  that 
most  of  them  looked  forward,  some  with  disapproval 
and  others  with  satisfaction,  to  a  considerable  curtail¬ 
ment  of  the  power  of  the  state  courts  and  to  the 
exercise  by  the  new  federal  courts  of  much  influence 
in  producing  uniformity  in  the  law. 

The  only  man  who  had  any  clear  conception  of  the 
position  which  the  federal  courts  would  occupy  was 
John  Marshall,  whose  place  on  the  Supreme  Court  in 
later  years  gave  him  the  opportunity  to  do  much  to 
realize  the  conception  which  he  had  of  the  duties  of 
those  courts.  But  even  he  was  not  altogether  right 
in  his  view.  For  while  the  federal  courts  have  in  the 
main,  and  in  obedience  to  the  action  of  Congress, 
applied  state  law  in  common  law  cases  arising  before 
them  as  a  result  of  diversity  of  citizenship,  they  have, 
as  has  been  shown,  abandoned  the  state  law,  so  far 
as  that  has  been  found  in  the  decisions  of  the  state 
courts  in  a  number  of  most  important  branches  of  the 
law.  But  Marshall  can  hardly  be  regarded  as  hold¬ 
ing  in  what  he  said  before  the  Virginia  convention, 

1  Ibid.,  p.  556. 


IQO  SOCIAL  REFORM  AND  THE  CONSTITUTION 


that  the  United  States  courts  would  be  obliged  to 
apply  state  law.  Indeed,  he  treats  the  question  as 
merely  a  question  of  judicial  usage  in  the  determination 
of  questions  arising  as  a  result  of  the  conflict  of  laws, 
and  says  nothing  to  indicate  that  Congress  did  not 
have  power  to  lay  down  the  law  to  be  applied  in  the 
courts  of  the  United  States.  Certainly,  what  he  says 
is  not  sufficient  to  offset  what  was  said  by  such  men 
as  Iredell  and  Wilson  as  to  the  unification  of  the  law 
of  the  country  which  in  their  opinion  would  follow  the 
establishment  of  the  judicial  system  of  the  United 
States. 

We  may  therefore  conclude  that  there  was  nothing 
said  in  the  conventions,  state  or  national,  which  either 
framed  or  adopted  the  United  States  constitution, 
clearly  indicating  that  those  responsible  for  that  in¬ 
strument  intended  to  deprive  either  the  new  courts 
of  the  function,  incident  to  judicial  power,  viz.  to 
lay  down  the  law  applicable  to  cases  before  them  where 
this  had  not  been  determined  by  legislative  authority, 
or  to  take  away  from  Congress  the  legislative  power 
to  determine  the  law  to  be  applied  by  the  United  States 
courts.  That  one  of  the  first  acts  of  the  first  Congress 
was  to  enact  that  in  trials  at  common  law  where  not 
otherwise  provided  by  the  laws  of  the  United  States 
the  laws  of  the  several  states  should  be  regarded  as 
rules  of  decision  in  the  United  States  courts,  is  indica¬ 
tive  of  doubt  whether  those  courts  would  apply  state 
law  in  the  absence  of  such  an  injunction.  Certainly, 
the  reservation  made  by  Congress  as  to  trials  at  com¬ 
mon  law,  and  its  positive  command  that  in  equity 
cases  the  United  States  courts  should  be  governed  by 
the  practice  of  courts  of  equity,  are  evidence  that 


PRIVATE  LAW 


I9I 

Congress  believed  that  it  had  the  power  to  determine 
what  law  should  be  applied  in  the  courts  of  the 
United  States.  The  fact  that  in  one  case,  viz.  in 
trials  at  common  law  Congress  provided  that  the 
laws  of  the  several  states  should,  in  the  absence  of 
Congressional  action  to  the  contrary,  be  regarded  as 
rules  of  decision  where  they  apply,  is  rather  evidence 
of  its  belief  that  it  was  expedient  at  the  time  to  make 
a  concession  to  the  strong  states’  rights  feeling  then 
existing  than  an  indication  that  it  did  not  consider 
that  it  had  the  constitutional  power  to  determine 
what  law  was  to  be  used  by  the  federal  courts  in  the 
exercise  of  the  judicial  power  of  the  United  States.1 

Are  there  now,  as  the  result  of  the  express  pro¬ 
hibitions  on  the  powers  of  Congress  or  of  the  general 
spirit  of  the  constitution,  any  limits  to  this  legislative 
power  of  Congress  ? 

Most  of  the  express  limitations  upon  the  power  of 
Congress  are  limitations  upon  the  express  powers 


1  See  on  this  point  remarks  by  counsel  in  Brown  v.  Van  Braam, 
3  Dallas,  344,  351,  decided  in  1797. 

£The  recent  decision  in  the  Employers’  Liability  cases  (207  U.  S. 
463)  may  seem  at  first  blush  to  deny  the  right  of  Congress  to  legislate 
with  regard  to  the  private  legal  relations  of  individuals.  But  an 
examination  of  the  case  shows  that,  in  the  words  of  Justice  White, 
“the  right  of  action  was  expressly  based  upon  the  act  of  Congress  of 
July  11,  1906,”  which  attempted  through  the  exercise  by  that  body 
of  its  commerce  power  to  regulate  the  relations  of  employers  and  em¬ 
ployed  when  engaged  in  interstate  commerce.  All  that  the  case  holds 
is  that  Congress  cannot  through  the  exercise  of  the  commerce  power 
regulate  the  relations  of  employees  not  engaged  in  interstate  commerce. 
As  the  lower  federal  court  obtained  jurisdiction  under  an  alleged  law 
of  the  United  States  and  not  through  the  diversity  of  citizenship  of 
the  parties  to  the  suit,  the  case  cannot  be  held  to  lay  down  any  rule 
as  to  the  legislative  power  which  Congress  may  exercise  under  the 
judicial  article  of  the  constitution. 


192  SOCIAL  REFORM  AND  THE  CONSTITUTION 


granted,  as,  for  example,  those  imposed  upon  the 
taxing  power.  There  are,  however,  a  few,  such  as 
those  imposed  by  the  fifth  amendment,  which  have 
been  held  to  limit  the  legislative  power  of  Congress 
under  the  commerce  clause,1  and  which,  if  the  occasion 
required,  would  undoubtedly  be  held  to  limit  any  of 
its  implied  legislative  powers  also.  But  such  express 
limitations  are  few  in  number  and  would  not  seriously 
diminish  those  powers.  The  statement  contained  in 
Art.  X  of  the  amendments,  to  the  effect  that  “the 
powers  not  delegated  to  the  United  States  by  the  con¬ 
stitution  nor  prohibited  by  it  to  the  states,  are  reserved 
to  the  states  or  to  the  people,”  cannot  be  regarded  as 
controlling,  since  the  question  at  issue  is  whether  a 
power  of  legislation  has  been  granted  to  Congress  by 
Art.  Ill  when  taken  in  connection  with  Art.  I,  Sec. 
8,  Paragraph  18. 

Is  there,  however,  anything  in  what  has  been 
termed  “the  spirit  of  the  constitution”  which  would 
prevent  the  exercise  by  Congress  of  legislative  power 
under  the  judicial  article.  It  cannot  be  denied  that 
one  is  apt  to  regard  the  proposition  that  Congress  has 
the  right  to  determine  the  private  legal  relations  of 
citizens  of  the  United  States  with  aliens  and  those 
of  citizens  of  one  state  with  citizens  of  another  as 
preposterous  and  as  clearly  out  of  harmony  with  the 
spirit  of  the  constitution ;  but  it  must  always  be  kept 
in  mind  that  existing  conditions  are  due,  not  to  the 
constitution,  but  to  Congress,  which  determined  to 
adopt  —  but  in  trials  at  common  law  only  —  the  laws  of 

1  Monongahela  Navigation  Company  v.  United  States,  148  U.  S. 
312;  Champion  v.  Ames,  188  U.  S.  321;  United  States  v.  Adair,  208 
U.  S.  161. 


PRIVATE  LAW 


*93 


the  several  states  as  rules  of  decision  for  the  federal 
courts.  This  action  of  Congress  was,  however,  taken 
in  the  latter  part  of  the  eighteenth  century,  at  a  time 
when  social  and  economic  conditions  were,  as  com¬ 
pared  with  the  present,  very  decentralized,  and  when 
the  jealousy  of  the  exercise  of  power  by  the  national 
government  was  very  great  and  the  insistence  upon 
the  rights  of  the  several  states  much  more  marked 
than  it  is  at  present.  It  must  further  be  remembered 
that  the  movement  for  a  centralization  of  the  law  of 
the  United  States  is  already  in  full  swing.  Congress 
has  already  centralized  the  maritime  law;  the  federal 
courts  are  centralizing  the  commercial  law,  particularly 
that  with  regard  to  municipal  bonds  and  the  law  of 
carriers  and  of  master  and  servant;  and  state  com¬ 
missioners  and  houses  of  governors  are,  as  has  been 
pointed  out,  meeting  every  year  in  the  effort  to  bring 
about  uniformity  in  those  branches  of  the  law  in  which 
uniformity  is  believed  to  be  desirable.  Who,  in  view 
of  these  facts,  will  dare  to  say  that  if  Congress,  be¬ 
coming  convinced  of  the  desirability  of  the  existence 
of  a  uniform  law  to  be  administered  by  the  federal 
courts  in  controversies  between  citizens  and  aliens 
and  between  citizens  of  different  states,  shall  make 
provision  by  legislation  for  such  law,  the  Supreme 
Court  will  say  it  nay?  Is  not  the  real  spirit  of  the 
constitution  that  matters  requiring  uniformity  of 
treatment  shall  receive  that  treatment  rather  than  that 
a  set  of  concrete  subjects,  determined  by  judicial 
decisions  made  under  special  economic  and  social 
conditions,  shall  for  all  time  be  assigned  to  Congress 
and  another  set  to  the  states  ?  Was  not  the  con¬ 
stitution  purposely  silent  as  to  the  law  to  be  applied 
o 


194  SOCIAL  REFORM  AND  THE  CONSTITUTION 


by  the  United  States  courts  ?  And  is  not  the  action 
of  the  Supreme  Court  in  extending  the  admiralty 
jurisdiction  and  in  deciding  that  Congress  has  power 
under  the  judicial  article  to  fix  the  maritime  law  based 
upon  the  idea  that  the  social  needs  of  the  country 
require  uniformity  in  this  branch  of  the  law  ?  If  the 
same  needs  are  felt  in  other  branches  of  the  law,  why 
should  it  be  claimed  that  Congress  has  not  the  con¬ 
stitutional  power  to  satisfy  those  needs?  Certainly 
there  is  no  distinct  prohibition  of  such  action.  On 
the  other  hand,  there  is  the  express  grant  of  power  to 
Congress  to  make  all  laws  which  shall  be  necessary 
and  proper  for  carrying  into  execution  all  powers 
vested  by  the  constitution  in  the  government  of  the 
United  States  or  in  any  department  or  officer  thereof ; 
and  it  cannot  be  denied  that  the  judicial  power  has 
been  vested  by  the  constitution  in  the  courts  of  the 
United  States,  and  that  courts  without  a  substantive 
law  are  inconceivable.  This  was  certainly  the  opinion 
of  Chief  Justice  Marshall  as  to  the  power  of  Congress 
to  legislate  concerning  the  remedies  to  be  applied  in 
the  federal  courts,  and  this  is  the  theory  upon  which 
both  Congress  and  the  Supreme  Court  have  acted  in 
the  development  of  the  remedies  which  may  be  used 
in  those  courts.  No  distinction  between  remedies 
and  substantive  law  is  made  by  the  constitution  in 
this  respect. 

Are  there,  however,  any  parts  of  the  law  to  be 
applied  by  the  United  States  courts  in  controversies 
arising  as  a  result  of  diversity  of  citizenship  to  which 
this  legislative  power  of  Congress  may  not  be  extended  ? 

In  answering  this  question  we  must  be  careful  not 
to  lay  too  great  emphasis  upon  those  decisions  of  the 


PRIVATE  LAW 


195 


Supreme  Court  made  in  applying  Section  721  of  the 
United  States  Revised  Statutes,  which  hold  that, 
under  the  law  as  it  now  stands,  the  federal  courts 
must  apply  state  laws  in  what  are  regarded  as  purely 
local  matters,  such  as  real  property ;  for  these  decisions 
were  made,  not  in  interpreting  the  constitution,  but 
in  construing  a  statute  of  Congress ;  and  there  is  more 
than  one  case  decided  by  the  federal  courts,  sitting 
as  courts  of  equity,  in  which  those  courts  have  refused 
to  follow  the  decisions  of  state  courts  even  where  the 
title  to  land  in  a  state  was  affected  thereby.1  But 
in  spite  of  these  equity  cases,  it  cannot  be  denied  that 
the  law  of  real  property  is  probably  more  thoroughly 
a  matter  of  local  concern  than  almost  any  other 
branch  of  the  law;  and  it  may  be  assumed  that  it 
will  be  with  the  greatest  hesitation  that  the  Supreme 
Court  will  ever  recognize  a  power  in  Congress,  should 
Congress  ever  desire  to  exercise  it,  to  regulate  the  law 
of  real  property.  It  must  be  remembered,  however, 
that  in  cases  of  diversity  of  citizenship  the  United 
States  courts  have  jurisdiction,  regardless  of  the 
character  of  the  controversy. 

Similar  considerations  present  themselves  when  we 
come  to  the  law  governing  domestic  relations.  There 
are  several  utterances  of  the  Supreme  Court  which  go 
far  to  support  the  proposition  that  the  judicial  power 
of  the  United  States  does  not  extend  over  the  field  of 
domestic  relations,  although,  it  must  be  confessed, 
no  satisfactory  reason  is  given  for  the  statement. 
Thus  in  Barber  v.  Barber,2  Justice  Wayne  says,  with¬ 
out  either  argument  or  citation:  “We  disclaim  al- 

1  See,  for  example,  Russell  v.  Southard,  12  Howard,  139. 

2  21  Howard,  582. 


196  SOCIAL  REFORM  AND  THE  CONSTITUTION 


together  any  jurisdiction  in  the  courts  of  the  United 
States  upon  the  subject  of  divorce,  or  for  the  allowance 
of  alimony,  either  as  an  original  proceeding  in  chan¬ 
cery  or  as  an  incident  to  divorce  a  vinculo  or  to  one 
from  bed  and  board. ”  In  this  case,  however,  the 
court  held  that  a  woman  who  was  separated  a  mensa  et 
thoro  from  her  husband  could  on  the  ground  of  diver¬ 
sity  of  citizenship  sue  her  husband,  who  had  left  the 
state  of  the  marriage  domicile,  in  the  courts  of  the 
United  States,  in  order  to  recover  against  him  a  claim 
for  alimony  based  on  the  decree  of  the  state  court 
granting  her  the  separation.  Again,  in  the  case  of 
In  re  Burrus,1  the  court  says,  in  denying  to  a  father 
a  habeas  corpus  to  recover  possession  of  his  infant 
child :  — 

“The  whole  subject  of  the  domestic  relations  of  husband  and 
wife,  parent  and  child,  belongs  to  the  laws  of  the  states  and  not 
to  the  laws  of  the  United  States.  As  to  the  right  to  the  control 
and  possession  of  this  child  as  it  is  contested  by  its  father  and  its 
grandfather,  it  is  one  in  regard  to  which  neither  the  Congress  of 
the  United  States  nor  any  authority  of  the  United  States  has 
any  special  jurisdiction.  Whether  the  one  or  the  other  is  en¬ 
titled  to  the  possession  does  not  depend  upon  any  act  of  Congress 
or  any  treaty  of  the  United  States  or  its  constitution.” 

What  is  here  said  as  to  the  law  of  the  domestic 
relations  is,  however,  merely  dictum,  as  the  case  was 
decided  on  the  ground  that  under  the  act  of  Congress 
the  courts  of  the  United  States  do  not  have  jurisdic¬ 
tion  to  issue  the  habeas  corpus  in  this  class  of  cases.2 

1  136  U.  S.  586. 

2  But  see  Andrews  v.  Andrews,  188  U.  S.  32,  and  Haddock  v. 
Haddock,  201  U.  S.  575,  where  a  similar  statement  is  made  a  ratio 
decidendi,  and  may  therefore  be  regarded  as  part  of  the  actual  de¬ 
cision. 


PRIVATE  LAW 


I97 


The  lack  of  any  instance  of  a  suit  for  divorce  originat¬ 
ing  in  the  United  States  courts  is  of  course  primarily 
due  to  the  fact  that  Congress  has  never  conferred  upon 
them  such  jurisdiction.  The  failure  of  Congress  to 
act  may  of  course  be  due  to  the  belief  that  a  divorce 
case  is  not  a  case  in  law  or  equity  and  that  no  court 
has  divorce  powers  except  as  a  result  of  statute.1  But 
it  is  to  be  remembered  that  the  term  “  law  and 
equity  ”  is  to  be  liberally  interpreted,  and  it  has  been 
decided  that  the  federal  courts  may  administer  new 
equitable  remedies  provided  by  state  statutes.2 

The  probate  law  is  in  somewhat  the  same  position  as 
the  law  of  domestic  relations.  That  is,  whatever  may 
be  the  constitutional  extent  of  the  powers  which  may 
be  given  by  Congress  to  the  federal  courts,  those 
courts  have  never  attempted  to  exercise  a  probate 
jurisdiction,  or,  even  by  an  equitable  proceeding,  to 
set  aside  the  probate  of  a  will.3  Their  reasons  for 
pursuing  this  course,  however,  have  apparently  been 
statutory  rather  than  constitutional;  and  they  have 
been  ready  to  take  jurisdiction  of  controversies  be¬ 
tween  citizens  of  different  states  arising  out  of  the 
transfer  of  property  under  a  will  or  in  the  case  of  intes¬ 
tacy.4  Thus  they  have  permitted  the  removal  to 
them  of  suits  instituted  in  state  courts  to  annul  a  will 
as  a  muniment  of  title,  where  the  will  had  been  ad¬ 
mitted  to  probate  as  a  result  of  a  prior  proceeding  in 

1  See  e.g.  Erkenbrach  v.  Erkenbrach,  96  N.  Y.  456. 

2  See  remarks  of  Justice  Field  in  Ellis  v.  Davis,  infra. 

3  Fouvergue  v.  Municipality,  18  Howard,  470;  Broderick’s  Will,  21 
Wallace,  503;  Reed  v.  Reed,  31  Fed.  49;  In  re  Cilley,  58  Fed.  977; 
In  re  Aspinwall’s  Estate,  83  Fed.  851 ;  Wold  v.  Franz,  100  Fed.  680. 

4  See  Foley  v.  Hartley,  72  Fed.  570;  In  re  Foley,  76  Fed.  390; 
Craigie  v.  McArthur,  4  Dillon,  474. 


198  SOCIAL  REFORM  AND  THE  CONSTITUTION 


a  state  court  and  where  the  state  law  recognized  such 
a  jurisdiction  in  the  state  courts.  This  was  done  in 
Gaines  v.  Fuentes.1 

1  92  U.  S.  10.  In  rendering  the  decision  in  this  case,  Justice  Field 
said:  “In  the  case  of  Broderick’s  Will,  21  Wallace,  503,  the  doctrine 
is  approved,  which  is  established  both  in  England  and  in  this  coun¬ 
try,  that  by  the  general  jurisdiction  of  courts  of  equity,  independent 
of  statutes,  a  bill  will  not  lie  to  set  aside  a  will  or  its  probate;  and, 
whatever  the  cause  of  the  establishment  of  this  doctrine  originally, 
there  is  ample  reason  for  its  maintenance  in  this  country,  from  the 
full  jurisdiction  over  the  subject  of  wills  vested  in  the  probate  courts, 
and  the  revisory  power  over  their  adjudications  in  the  appellate 
courts.  But  that  such  jurisdiction  may  be  vested  in  the  state  courts 
of  equity  by  statute  is  there  recognized,  and  that,  when  so  vested, 
the  federal  courts,  sitting  in  the  states  where  such  statutes  exist, 
will  also  entertain  concurrent  jurisdiction  in  a  case  between  proper 
parties. 

“There  are,  it  is  true,  in  several  decisions  of  this  court  expressions 
of  opinion  that  the  federal  courts  have  no  probate  jurisdiction,  re¬ 
ferring  particularly  to  the  establishment  of  wills;  and  such  is  un¬ 
doubtedly  the  case  under  the  existing  legislation  of  Congress.  The 
reason  lies  in  the  nature  of  the  proceeding  to  probate  a  will  as  one  in 
rent ,  which  does  not  necessarily  involve  any  controversy  between 
parties ;  indeed,  in  the  majority  of  instances,  no  controversy  exists. 
In  its  initiation  all  persons  are  cited  to  appear,  whether  of  the  state 
where  the  will  is  offered,  or  of  other  states.  From  its  nature,  and 
from  the  want  of  parties,  or  the  fact  that  all  the  world  are  parties, 
the  proceeding  is  not  within  the  designation  of  cases  at  law  or  in 
equity  between  parties  of  different  states,  of  which  the  federal  courts 
have  concurrent  jurisdiction  with  the  state  courts  under  the  Judiciary 
Act;  but  whenever  a  controversy  in  a  suit  between  such  parties 
arises  respecting  the  validity  or  construction  of  a  will,  or  the  enforce¬ 
ment  of  a  decree  admitting  it  to  probate,  there  is  no  more  reason  why 
the  federal  courts  should  not  take  jurisdiction  of  the  case  than  there 
is  that  they  should  not  take  jurisdiction  of  any  other  controversy 
between  the  parties.” 

This  same  doctrine  was  laid  down  by  Justice  Matthews  in  Ellis 
v.  Davis  (109  U.  S.  485,  496,  497).  He  said:  “The  judicial  power  of 
the  United  States  extends,  by  the  terms  of  the  constitution,  ‘to  con¬ 
troversies  between  citizens  of  different  states’ ;  and  on  the  supposition 
which  is  not  admitted,  that  this  embraces  only  such  as  arise  in  cases 
‘in  law  and  equity’  it  does  not  necessarily  exclude  those  which  may 


PRIVATE  LAW 


199 


But  the  power  which  the  courts  of  the  United  States 
thus  have  over  the  estates  of  deceased  persons  does  not 
give  them  the  right  to  assume  full  control  of  such 
estates  so  as  to  distribute  them  among  all  persons 

involve  the  exercise  of  jurisdiction  in  reference  to  the  proof  of  the 
validity  of  wills.  The  original  probate,  of  course,  is  mere  matter  of 
state  regulation,  and  depends  entirely  upon  the  local  law;  for  it  is 
that  law  which  confers  the  power  of  making  wills,  and  prescribes 
the  conditions  upon  which  alone  they  may  take  effect;  and  as,  by 
the  law  in  almost  all  the  states,  no  instrument  can  be  effective  as  a 
will  until  proved,  no  rights  in  relation  to  it,  capable  of  being  con¬ 
tested  between  parties,  can  arise  until  preliminary  probate  has  been 
first  made.  Jurisdiction  as  to  wills,  and  their  probate  as  such,  is 
neither  included  in  nor  excepted  out  of  the  grant  of  judicial  power 
to  the  courts  of  the  United  States.  So  far  as  it  is  ex  parte  and  merely 
administrative,  it  is  not  conferred,  and  it  cannot  be  exercised  by  them 
at  all  until,  in  a  case  at  law  or  in  equity,  its  exercise  becomes  necessary 
to  settle  a  controversy  of  which  a  court  of  the  United  States  may 
take  cognizance  by  reason  of  the  citizenship  of  the  parties.  It  has 
often  been  decided  by  this  court  that  the  terms  Taw’  and  ‘equity, 
as  used  in  the  constitution,  although  intended  to  mark  and  fix  the 
distinction  between  the  two  systems  of  jurisprudence  as  known  and 
practiced  at  the  time  of  its  adoption,  do  not  restrict  the  jurisdiction 
conferred  by  it  to  the  very  rights  and  remedies  then  recognized  and 
employed,  but  embrace  as  well  not  only  rights  newly  created  by 
statutes  of  the  states  as  in  cases  of  actions  for  the  loss  occasioned  to 
survivors  by  the  death  of  a  person  caused  by  the  wrongful  act,  neglect, 
or  default  of  another  (Railway  Company  v.  Whitton,  13  Wallace,  270, 
287;  Dennick  v.  Railroad  Company,  103  U.  S.  11),  but  new  forms 
of  remedies  to  be  administered  in  the  courts  of  the  United  States 
according  to  the  nature  of  the  case,  so  as  to  save  to  suitors  the  right 
to  trial  by  jury  in  cases  in  which  they  are  entitled  to  it  according  to 
the  course  and  analogy  of  the  common  law.” 

Applying  these  principles,  the  Supreme  Court  has  often  held  that 
“the  general  equity  jurisdiction  of  the  circuit  court  of  the  United 
States  to  administer,  as  between  citizens  of  different  states,  the  assets 
of  a  deceased  person  within  its  jurisdiction  cannot  be  defeated  or 
impaired  by  laws  of  a  state  undertaking  to  give  exclusive  jurisdiction 
to  its  own  courts.”  (Lawrence  v.  Nelson,  143  U.  S.  215,  223.  See 
also  Clark  v.  Bever,  139  U.  S.  96,  103 ;  Hayes  v.  Pratt,  147  U.  S.  557; 
Payne  v.  Hook,  7  Wallace,  425.) 


200  SOCIAL  REFORM  AND  THE  CONSTITUTION 

interested  therein,  citizens  and  noncitizens.  A  debt 
against  an  estate  may  be  established  in  a  federal  court, 
but  the  debt  so  established  “  must  take  its  place  and 
share  of  the  estate  as  administered  by  the  probate 
court;  and  it  cannot  be  enforced  by  process  directly 
against  the  property  of  the  decedent.”  1 

Finally,  it  is  difficult  to  conceive  that  Congress  could 
derive  from  the  judicial  article  any  legislative  powers 
with  regard  to  matters  falling  within  the  adminis¬ 
trative  law  of  the  states.  It  could  hardly  undertake 
to  determine,  for  example,  the  law  governing  taxation, 
officers,  the  police  power,  or  municipal  corporations.2 
It  is  true,  of  course,  that  there  are  a  number  of  pro¬ 
visions  in  the  United  States  constitution,  like  the 
fourteenth  and  fifteenth  amendments,  which  limit  the 
powers  of  the  states,  and  which  at  the  same  time  ex¬ 
pressly  confer  upon  Congress  the  power  to  enforce 
these  limitations  by  appropriate  legislation.  The 
Supreme  Court  has  interpreted  the  fourteenth  amend¬ 
ment  as  confining  Congress  to  legislation  directed 
against  the  actions  of  the  states,3  and  it  is  difficult 
to  see  how,  under  this  amendment,  Congress  could 
prescribe  the  administrative  proceedings  which  states 
must  follow  in  depriving  a  person  of  his  life,  liberty,  or 
property.  Without  such  legislation,  however,  the 
Supreme  Court  has  already  laid  down  certain  limits 
beyond  which  the  state  may  not  go. 

It  is  true,  also,  as  has  been  pointed  out,  that,  in  the 
exercise  of  their  jurisdiction  based  on  diversity  of 
citizenship,  the  federal  courts  have  developed  in  the 

1  Byers  v.  McAuley,  149  U.  S.  608,  620. 

2  See  e.g.  Detroit  v.  Osborne,  135  U.  S.  492. 

3  Cruikshank  v.  United  States,  92  U.  S.  542. 


PRIVATE  LAW 


201 


case  of  municipal  bonds  a  law  of  estoppel  by  recital 
which  is  quite  opposed  to  the  law  administered  in  the 
courts  of  some  of  the  states.  But  it  is  very  doubtful,  to 
say  the  least,  whether  the  federal  courts  could  independ¬ 
ently  determine  the  regularity  of  the  issue  of  municipal 
bonds  where  the  matter  had  been  clearly  regulated  by 
a  state  statute; 1  and  if  the  federal  courts  have  no  such 
power,  Congress  could  hardly  exercise  legislative  pow¬ 
ers  as  to  the  subject.  At  the  same  time  it  is  to  be 
remembered  that  the  law  of  municipal  bonds  and  other 
similar  securities  has  a  great  resemblance  to  the  law  of 
negotiable  paper,  in  regard  to  which  the  federal  courts 
have  claimed  large  powers  of  independent  action. 

Finally,  it  is  well  to  remember  that  no  provision  of 
the  constitution,  either  expressly  or  impliedly,  imposes 
upon  the  United  States  government  the  obligation  to 
administer  in  its  courts  any  law  of  which  it  does  not 
approve.  The  courts  of  the  United  States  are  instru¬ 
ments  of  the  United  States  government,  just  as  the 
post  office  is  such  an  instrument;  and  it  has  been  held 
that  Congress  has  the  right  to  determine  that  it  will 
not  lend  itself  or  its  post  offices  to  the  distribution  of 
mail  matter  of  which  it  does  not  approve.2  What  is 
there  in  the  constitution  to  prevent  Congress  from 
determining  that  it  will  not  permit  its  courts  to  be 
made  use  of  to  administer  laws  which  it  deems  to  be 
improper  ?  It  would  not  by  so  doing  infringe  upon  the 
rights  of  the  states,  any  more  than  a  court  of  England 
would  be  infringing  upon  the  rights  of  the  state  of 
New  York  if  it  applied  to  a  case  before  it,  arising 
between  a  British  citizen  and  a  citizen  of  New  York, 

1  Waite  v.  Santa  Cruz;  184  U.  S.  302,  319. 

2  In  re  Rapier,  143  U.  S.  no;  Ex  parte  Jackson,  96  U.  S.  727. 


202  SOCIAL  REFORM  AND  THE  CONSTITUTION 

an  act  of  Parliament  contrary  to  the  general  princi¬ 
ples  of  international  private  law. 

II 

The  question,  how  far  Congress  has  attempted,  or 
in  the  absence  of  federal  legislation  the  federal  courts 
themselves  have  attempted,  to  lay  down  the  substan¬ 
tive  law  to  be  applied  by  them  in  the  exercise  of  the 
judicial  power  conferred  upon  them  by  Art.  Ill  of 
the  constitution,  has  been  practically  answered  in  the 
foregoing  pages.  By  way  of  summing  up  the  points 
already  noted,  it  may  be  said  that  Congress  has  laid 
down  the  rule  that,  in  trials  at  common  law,  the  fed¬ 
eral  courts  are,  except  as  otherwise  provided,  to  regard 
the  laws  of  the  several  states  as  rules  of  decision.  Con¬ 
gress  has,  however,  otherwise  provided  as  to  the  com¬ 
petency  of  witnesses.  The  United  States  courts  have 
with  Congressional  authority  developed  their  own 
system  of  equity  jurisprudence*,  and  they  have  acted 
independently  of  the  decisions  of  the  state  courts,  and, 
in  rare  cases,  even  of  state  statutes,  in  certain  branches 
of  the  law,  prominent  among  which  are  the  commercial 
law  and  the  law  of  master  and  servant.  Practically 
the  whole  field  of  admiralty  and  maritime  law  is  regu¬ 
lated  by  Congress,  whose  action  is  regarded  as  con¬ 
trolling  that  of  the  states  in  those  cases  in  which  the 
states  have  been  recognized  as  possessing  concurrent 
powers  of  action.  Congress  has  also  fixed  the  liabili¬ 
ties  of  the  United  States  government  acting  in  a  pri¬ 
vate  legal  capacity. 

It  cannot  therefore  be  said  that,  apart  from  the 
maritime  law  and  the  law  affecting  the  liabilities  of  the 


PRIVATE  LAW 


203 


United  States  government,  in  which  the  jurisdiction  of 
the  federal  courts  is  for  the  most  part  made  exclusive 
by  act  of  Congress,  either  Congress  or  the  federal 
courts  have  claimed  or  exercised  the  right  to  deter¬ 
mine  the  law  to  be  applied  by  the  federal  courts  in 
their  exercise  of  the  judicial  power  granted  to  the 
United  States  by  the  constitution.  But  the  few  cases 
in  which  the  claim  has  been  made  by  the  federal  courts, 
when  taken  in  connection  with  the  extensive  powers  of 
legislation  which  Congress,  with  the  approval  of  the 
Supreme  Court,  has  actually  exercised  in  regard  to  the 
maritime  law,  go  far  towards  proving  the  proposition 
that  Congress  both  has,  and  has  exercised,  legislative 
powers  which  are  derived  from  the  judicial  article 
of  the  constitution. 

Ill 

The  third  point  to  which  it  is  desirable  to  direct 
attention  is  the  effect  which  the  recognition  of  the  leg¬ 
islative  power  here  attributed  to  Congress  would  have 
on  our  law. 

The  answer  to  this  question  is  dependent  in  large 
measure  upon  a  consideration  of  two  points:  the  ex¬ 
tent  to  which  the  jurisdiction  of  the  federal  courts  in 
cases  of  diversity  of  citizenship  is  limited  by  Congres¬ 
sional  legislation  and  may  be  widened  by  Congress, 
and  the  extent  to  which,  under  the  decisions  of  the 
federal  courts,  diversity  of  citizenship  may  be  arti¬ 
ficially  produced,  for  example,  by  assignment  of  claims 
or  by  change  of  residence,  for  the  purpose  of  establish¬ 
ing  federal  jurisdiction. 

Inasmuch  as  Congress  has  the  right  to  vest  in  the 
federal  courts  such  portion  of  the  judicial  power  of  the 


204  SOCIAL  REFORM  AND  THE  CONSTITUTION 


United  States  as  it  sees  fit,  and  need  not  grant  the  entire 
judicial  power,  it  may  limit  the  jurisdiction  of  such 
courts  in  cases  of  diversity  of  citizenship.  As  a  mat¬ 
ter  of  fact,  it  has  done  so,  in  the  act  of  March  3,  1875, 
Chapter  47 5, 1  as  amended.  In  this  act  the  jurisdic¬ 
tion  of  the  circuit  courts  is  limited  to  suits  of  a  civil 
nature  at  common  law  or  in  equity  where  the  matter 
in  dispute  exceeds,  exclusive  of  interest  and  costs,  the 
sum  of  two  thousand  dollars.2  It  is  furthermore  pro¬ 
vided  that,  in  case  the  jurisdiction  is  based  on  diver¬ 
sity  of  citizenship,  no  circuit  court  or  district  court 
shall  have  cognizance  of  any  suit,  except  upon  foreign 
bills  of  exchange,  to  recover  the  contents  of  any  prom¬ 
issory  note  or  other  chose  in  action  in  favor  of  any 
assignee,  or  of  any  subsequent  holder,  if  such  instru¬ 
ment  be  payable  to  bearer  and  be  not  made  by  any 
corporation,  unless  such  suit  might  have  been  prose¬ 
cuted  in  such  court  to  recover  said  contents  if  no  assign¬ 
ment  or  transfer  had  been  made.  Another  section  of 
the  same  act  provides  for  the  removal  by  the  defendant 
to  the  circuit  court  of  any  suit  begun  in  a  state  court  of 
which  the  circuit  court  has  jurisdiction  by  reason  of 
diversity  of  citizenship. 

Under  these  provisions  either  the  plaintiff  may  ini¬ 
tiate  the  suit  in  a  federal  court,  or  the  defendant  may 
remove  it  to  the  federal  court  if  it  has  been  begun  in  a 
state  court;  so  that  it  is  possible,  where  either  of  the 
parties  to  a  suit  of  which  the  federal  courts  have  juris¬ 
diction  so  desires,  to  have  the  case  tried  in  such  courts, 
although  the  act  of  Congress  expressly  provides  that 

1  18  Statutes  at  Large,  470. 

2  The  Judiciary  Act  just  passed  by  Congress  has  raised  this  limit 
to  $3000. 


PRIVATE  LAW 


205 


the  federal  courts  in  these  cases  of  diversity  of  citizen¬ 
ship  shall  have  a  jurisdiction  which  is  concurrent  with 
that  of  the  state  courts.  If,  therefore,  the  people  of 
this  country  were  on  the  whole  better  satisfied  with 
either  the  procedure  of  the  federal  courts  or  with  the 
law  administered  therein,  and  if  Congress  should  re¬ 
move  the  prohibition  as  to  assignments,  or  should 
make  the  jurisdiction  of  the  United  States  courts 
exclusive  in  all  the  cases  in  which  the  judicial  power 
of  the  United  States  is  recognized  in  the  constitution, 
they  could,  and  would,  in  cases  of  diversity  of  citizen¬ 
ship,  neglect  the  state  courts  and  try  all  their  cases  in 
the  federal  courts. 

The  possibility  of  a  great  increase  of  the  work  of  the 
federal  courts  was  undoubtedly  present  in  the  mind  of 
Congress  when  it  passed  the  law  cited  above,  denying 
to  the  federal  courts  jurisdiction  where  there  had  been 
an  assignment  of  a  promissory  note  or  other  chose  in 
action  in  order  to  give  a  federal  court  jurisdiction. 
This  prohibition,  however,  is  purely  statutory  and  may 
therefore  be  removed,  as  it  was  imposed,  by  Congress. 

Further,  notwithstanding  the  prohibition  of  assign¬ 
ment,  there  are  still  certain  claims  which  may  be  the 
basis  of  suit  and  which  may  be  assigned;  and  the 
Supreme  Court  has  held  that,  if  there  is  a  consideration 
for  the  assignment,  without  which  consideration  the 
federal  courts  will  not  take  jurisdiction,1  the  mere 
fact  that  the  sole  purpose  of  the  assignment  was  to 
give  the  federal  courts  jurisdiction  will  not  divest 
them  of  jurisdiction.2  The  lower  United  States 
courts  have  also  held  that,  if  a  citizen  removes  from 

1  Bernards  Township  v.  Stebbins,  109  U.  S.  341. 

2  Lehigh,  etc.,  Company  v.  Kelly,  160  U.  S.  327. 


206  social  reform  and  the  constitution 

one  state  to  another  in  order  to  prosecute  a  suit  in  the 
courts  of  the  United  States,  provided  the  removal  be 
real,  the  motive  of  the  act  cannot  be  inquired  into;1 
and  that  the  change  of  domicile  or  acquisition  of  citizen¬ 
ship  after  the  commencement  of  a  suit  in  the  federal 
courts  will  not  oust  their  jurisdiction,  if  such  jurisdiction 
were  rightfully  acquired  originally.2  This  being  the 
law,  we  have  only  to  remember  what  happened  long 
ago,  in  England,  when  the  royal  courts,  with  their 
more  satisfactory  procedure  and  remedies,  came  into 
competition  with  the  popular  courts.  These  latter 
bodies  found  themselves  deserted  to  such  an  extent  by 
suitors,  who  preferred  the  justice  administered  by  the 
royal  courts,  that  they  gradually  dropped  out  of  exist¬ 
ence,  although  they  were  never  abolished  by  act  of 
Parliament. 

Of  course,  the  jurisdiction  of  the  federal  courts  could 
not,  under  the  existing  constitution,  be  extended  so 
far  as  was  that  of  the  royal  courts.  There  would  of 
necessity  remain  considerable  litigation  between  resi¬ 
dents  of  the  same  state,  and  there  are  parts  of  the  law 
which  would  presumably  continue  to  be  determined  by 
the  courts  or  the  legislatures  of  the  states.  But  the 
activity  of  the  state  courts  as  compared  with  that  of 
the  federal  courts  would  be  so  small  and  their  influence 
so  slight  that  they  could  hardly  fail  to  be  dominated 
by  the  latter,  and  the  federal  decisions  would  thus 
exercise  a  vastly  greater  force  than  at  present  for  the 
unification  of  the  law. 

We  may  conclude,  then,  that  there  is  more  reason 

1  Briggs  v.  French,  2  Sumner,  251. 

2  Haracovic  v.  Standard  Oil  Company,  105  Fed.  Rep.  785,  and 

cases  cited.  .  , 


PRIVATE  LAW 


207 


than  at  first  blush  would  appear,  for  believing  that 
under  the  constitution,  as  it  now  stands,  it  is  in  the 
power  of  Congress  to  exercise  a  tremendous  influence 
on  the  unification  of  the  law.  Through  the  exercise 
of  its  power  under  the  commerce  clause  to  regulate  the 
legal  relations  of  shippers  and  carriers  and  employer 
and  employees  in  interstate  and  foreign  commerce,  to 
charter  corporations  for  the  purpose  of  engaging  in 
foreign  and  interstate  commerce  and  to  determine  their 
legal  relations,  and  by  its  prohibitions  to  influence  the 
conditions  of  labor  and  through  the  exercise  of  its 
power  to  lay  down  the  law  to  be  applied  in  con¬ 
troversies  before  the  United  States  courts  between 
citizens  of  d  fferent  states,  and  citizens  and  aliens, 
Congress  may,  it  is  believed,  take  long  steps  toward 
securing  that  national  law,  the  necessity  of  securing 
which  would  seem  to  be  growing  more  pressing 
every  day. 

The  views  which  have  been  advanced  with  regard 
to  the  powers  of  Congress  both  under  the  commerce 
clause  and  the  judicial  article  of  the  United  States 
constitution  are  views,  which,  it  ought  to  be  said, 
are  in  all  probability  not  universally,  or  perhaps 
even  generally,  accepted.  They  are,  in  fact,  opposed 
to  the  historical  tradition  which  has  sprung  up  with 
regard  to  that  instrument.  Owing  to  the  extreme 
individualism  which  has  been  characteristic  of  Amer¬ 
ican  political  ideas,  and  to  the  states’  rights  reaction 
which  followed  the  death  of  Chief  Justice  Marshall, 
there  has  been  a  tendency  during  the  past  sixty  or 
seventy  years  either  for  Congress  not  to  exercise 
powers  which  are  without  doubt  within  its  competence, 
or  for  lawyers  generally  to  question  the  propriety, 


208  social  reform  and  the  constitution 


if  not  the  constitutionality,  of  action  on  the  part  of 
government  whether  state  or  national. 

One  advantage  which  this  individualistic  theory 
has  had,  however,  has  been,  as  has  been  intimated, 
to  lay  the  foundation  of  more  effective  Congressional 
action  when  the  need  for  it  has  been  felt.  For  the 
very  denial  of  the  power  of  the  states  to  take  action 
carried  with  it  as  an  almost  logical  result  the  recogni¬ 
tion  of  the  power  of  Congress.  This  statement  is 
particularly  true  of  the  cases  in  which  the  power  of 
the  states  to  regulate  commerce  was  denied.  The 
denial  of  that  power  was  made  because  the  subject 
attempted  to  be  regulated  was  a  part  of  that  commerce 
which  was  by  the  constitution  subject  to  the  regulation 
of  Congress.  The  denial  of  the  right  of  the  states 
was  thus  an  assertion  of  the  right  of  Congress. 

In  a  number  of  instances  in  which  powers  have  been 
claimed  for  Congress  it  may  not,  however,  be  said 
that  the  right  of  the  states  has  been  denied.  We  have 
in  these  instances  no  decisions  even  thus  indirectly 
recognizing  Congressional  authority.  In  these  cases 
the  attempt  has  been  made  to  show  that  that  author¬ 
ity  exists.  But  the  claim  cannot  be  made  that  the 
competence  of  the  federal  government  has  been  proved 
beyond  the  peradventure  of  a  doubt.  If  Congress 
should  attempt  to  exercise  the  powers  in  question, 
and  the  constitutionality  of  such  attempts  should 
be  brought  before  the  Supreme  Court,  the  cases  would 
be  cases  of  first  impression,  and  the  court  would  be 
necessarily  called  upon,  as  it  was  in  the  early  history 
of  the  country,  to  take  a  position  either  on  the  side 
of  national  supremacy  or  on  that  of  states  rights. 
Probably  the  decisions  rendered  would  not  always 


PRIVATE  LAW 


209 


be,  as  they  have  not  always  been  in  the  past,  made  by 
a  unanimous  court.  Probably,  also,  the  dissenting 
opinions  would  be  from  the  viewpoint  of  logic  or 
even  from  the  viewpoint  of  history  quite  as  satis¬ 
factory  and  convincing  as  the  opinions  of  the  majority. 
Really,  the  actual  decisions  reached  would  be  made 
as  the  result  of  the  personal  political  beliefs  of  the 
members  of  the  court.  The  justices  of  the  Supreme 
Court  are,  notwithstanding  their  exalted  position, 
after  all  is  said,  only  men.  Some  of  them  would  think 
that  present  conditions  require  an  extension  of  national 
power;  some  of  them,  on  the  other  hand,  would  depre¬ 
cate  any  such  action  and  would  believe  that  the 
maintenance  of  the  powers  of  the  states  in  their 
present  condition  is  necessary  to  our  welfare  as  a 
nation. 

On  this  account  too  much  emphasis  cannot  be  laid 
upon  the  proposition  that  the  constitution  did,  as  a 
matter  of  fact,  give  to  the  federal  government  a  sphere 
of  action  whose  limits  are  to  be  laid  down,  not  as  a 
result  of  an  acceptance  of  the  historical  tradition  of 
constitutional  power  of  the  last  sixty  or  seventy  years, 
but  rather  as  a  result  of  a  consideration  of  the  present 
needs  of  the  country.  These  should  be  permitted 
to  influence  the  interpretation  of  the  provisions  of 
the  constitution  purposely  left  very  general  in  char¬ 
acter.  It  is  submitted  that  such  a  theory  of  consti¬ 
tutional  interpretation,  and  only  such  a  theory,  will 
permit  us  so  to  develop  our  political  system  as  to 
bring  it  into  accord  with  the  facts  of  modern  Ameri¬ 
can  life. 


CHAPTER  V 


CONSTITUTIONALITY  OF  POLITICAL  REFORM 

I.  The  Separation  of  Governmental  Powers 

The  political  organization  provided  in  1787  for  the 
government  of  the  United  States  was  set  forth  in 
broad  outline,  at  any  rate,  in  the  constitution.  It 
was  based  upon  the  separation  of  the  legislative, 
executive,  and  judicial  powers.  A  bicameral  legis¬ 
lature  was  established,  one  house  of  which  should 
represent  the  states,  the  other  of  which  should  be 
elected  by  the  people  of  the  various  districts  into 
which  the  states  were,  for  this  purpose,  to  be  divided. 
The  only  officers  to  be  elected  by  the  people  were  the 
members  of  the  House  of  Representatives.  The 
constitution  did  not  itself,  however,  fix  the  qualifica¬ 
tions  of  the  voters  who  should  elect  these  officers,  but 
left  that  matter  to  be  determined  by  the  states  by 
providing  that  “electors  in  each  state  shall  have  the 
qualifications  requisite  for  electors  of  the  most  numer¬ 
ous  branch  of  the  state  legislature.” 

All  the  other  officers  of  the  United  States  govern¬ 
ment  were  to  be  chosen  either  by  executive  appoint¬ 
ment  or  as  a  result  of  the  action  of  authorities  of  the 
state  governments.  Thus,  the  President  and  Vice  Presi¬ 
dent  were  to  be  chosen  by  electors  to  be  selected  by  each 
of  the  states  in  such  manner  as  the  legislature  thereof 
might  direct,  while  the  members  of  the  United  States 


210 


CONSTITUTIONALITY  OF  POLITICAL  REFORM  211 


Senate  representing  each  state  were  to  be  “  chosen 
by  the  legislature  thereof.” 

Owing  to  the  fact  that  the  people  of  the  states 
possessed  under  the  constitution  the  power  to  fix 
the  qualifications  of  the  electors  for  their  own  legis¬ 
latures  and,  as  a  consequence,  also  those  of  the  electors 
for  members  of  the  House  of  Representatives,  the  con¬ 
ditions  of  suffrage  for  electors  for  the  only  popularly 
elective  officers  of  the  United  States  were  until  soon  after 
the  Civil  War  a  purely  state  matter.  The  fourteenth 
and  fifteenth  amendments  have,  it  is  true,  somewhat 
limited  this  power  of  the  states.  But  within  the 
limits  of  those  amendments  the  states  are  still  supreme. 
As  state  constitutions  are,  comparatively  speaking, 
easily  amended,  the  qualifications  for  suffrage  are 
also  easily  changed  and,  as  a  matter  of  fact,  have 
been  frequently  and  greatly  modified  during  the  past 
century. 

Notwithstanding  the  provisions  of  the  constitution 
evidently  attempting  to  prevent  the  people  from 
electing  either  the  President  or  senators,  the  people 
have,  through  the  adoption  of  extra-legal  methods 
of  political  action,  succeeded  in  changing  the  method 
of  choosing  the  president  so  as  to  make  what  we  call 
the  presidential  election  a  really  popular  election.  A 
similar  movement  has  been  set  on  foot  with  consider¬ 
able  success  in  the  case  of  the  United  States  senators. 
In  the  one  case  the  presidential  electors,  in  the  other 
the  state  legislatures,  which  under  the  constitution 
have  the  legal  power  of  choice,  have  been  reduced 
to  the  position  of  ministerial  bodies  which  merely 
register  the  determination  of  the  people  of  the  states 
represented  by  them.  In  both  these  instances  it 


212  SOCIAL  REFORM  AND  THE  CONSTITUTION 


will  be  noticed  that  a  real  change  has  been  made  in 
the  political  organization  of  the  United  States  govern¬ 
ment,  not  by  constitutional  amendment,  but  by  a  sort 
of  popular  agreement,  without  the  sanction  of  law, 
that  the  game  of  politics  shall  be  played  in  accordance 
with  a  new  set  of  rules.  He  would,  therefore,  be  a 
rash  man  who  would  venture  to  say  that  the  United 
States  constitution,  difficult  of  amendment  as  it  is, 
absolutely  precludes  changes  —  even  important 
changes  —  in  our  political  organization.  The  applica¬ 
tion  of  the  recall,  e.g.  to  members  of  both  houses  of 
Congress  through  a  somewhat  similar  method  as  is 
now  being  applied  in  order  to  secure  the  election  of 
senators  in  some  of  the  states,  is  by  no  means  incon¬ 
ceivable. 

It  has  been  said  that  the  political  organization  pro¬ 
vided  for  by  the  United  States  constitution  was  based 
upon  the  principle  of  the  separation  of  the  legislative, 
executive,  and  judicial  powers  of  government.  Mr. 
Justice  Miller  of  the  Supreme  Court  of  the  United 
States  said  in  Kilbourn  v.  Thompson: 1  — 

“It  is  believed  to  be  one  of  the  chief  merits  of  the  American 
system  of  written  constitutional  law  that  all  the  powers  intrusted 
to  government,  whether  state  or  national,  are  divided  into  three 
grand  departments  —  the  executive,  the  legislative,  and  judicial. 
That  the  functions  appropriate  to  each  of  these  branches  of 
government  shall  be  vested  in  a  separate  body  of  public  servants, 
and  that  the  perfection  of  the  system  requires  that  the  lines 
which  separate  these  departments  shall  be  broadly  and  clearly 
defined.  It  is  also  essential  to  the  successful  working  of  this 
system  that  the  persons  intrusted  with  power  in  any  one  of  these 
branches  shall  not  be  permitted  to  encroach  upon  the  power 
confided  to  the  others,  but  that  each  shall  by  the  law  of  its 


1 103  U.  S.  168. 


CONSTITUTIONALITY  OF  POLITICAL  REFORM  213 

creation  be  limited  to  the  exercise  of  the  powers  appropriate  to 
its  own  department  and  no  other.” 

Mr.  Justice  Miller’s  statement  that  the  principle 
of  the  separation  of  powers  is  at  the  basis  of  the  state 
governments,  must  not,  however,  be  understood  as 
indicating  that  the  constitution  of  the  United  States 
makes  this  principle  obligatory  upon  the  states.  It 
is  indeed  true  that  the  United  States  constitution 
mentions  several  times  both  a  state  legislature 1 
and  a  state  executive  authority,2  while  mention  is 
made  at  any  rate  of  state  judges.3  But  the  Supreme 
Court  has  held  in  a  number  of  cases  that  the  consti¬ 
tution  does  not  prevent  the  grant  of  any  power  to 
any  authority  in  the  state  government.4  The  only 
constitutional  obligation  on  this  subject  imposed 
upon  the  power  of  the  state  legislatures  to  organize 
the  state  governments  as  they  see  fit  is  to  be  found 
in  state  constitutions  and  is  not  of  great  importance, 
since  state  constitutions  are  easily  amended. 

But  wherever  the  constitutional  rule  is  to  be  found, 
it  is,  as  a  matter  of  fact,  at  the  basis  of  the  system  of 
government  of  both  the  United  States  and  the  states. 
It  is  furthermore  at  the  same  time  a  political  prin¬ 
ciple  and  also,  because  the  courts  may  declare  an  act 
of  the  legislature  unconstitutional,  a  rule  of  law.  But 
both  as  a  principle  of  political  science  and  as  a  rule 

1  E.g.  Art.  I,  Sec.  2,  Par.  1 ;  Sec.  4,  Par.  1 ;  Art.  II,  Sec.  1,  Par.  2 ; 
Art.  IV,  Sec.  4. 

2  Art.  I,  Sec.  2,  Par.  4 ;  Sec.  3,  Par.  1 ;  Art.  IV,  Sec.  2,  Par.  2 ; 
Sec.  4. 

3  Art.  VI. 

4  Satterlee  v.  Mathewson,  2  Peters,  380 ;  Consolidated  Rendering 
Co.  v.  Vermont,  207  U.  S.  541;  Dreyer  v.  Illinois,  187  U.  S.  71; 
Ughebanks  v.  Armstrong,  208  U.  S.  481. 


214  SOCIAL  REFORM  AND  THE  CONSTITUTION 


of  law,  its  force  is  being  much  weakened.  The  success 
that  the  people  of  this  country  have  had  in  bringing 
it  about  that  the  President  is  elected  as  a  result  of  a 
popular  vote,  the  constitution,  to  the  contrary  not¬ 
withstanding,  has  seriously  weakened  the  force  of 
the  principle  as  a  principle  of  political  science.  For, 
as  every  one  knows,  the  President  at  the  present  time 
exercises  an  enormous  influence  over  the  legislation  of 
Congress.  In  fact,  all  really  important  bills  are  known 
as  administration  bills.  Few  projects  of  law  have  any 
chance  of  enactment  by  Congress  which  are  opposed 
by  the  President.  In  the  states  as  well,  governors  are 
influencing  more  and  more  the  legislatures,  and  in  some 
cases  are  even  bending  them  to  the  executive  will 
against  their  wishes.  The  widespread  movement 
throughout  the  country  in  favor  of  what  is  known 
as  the  “commission  form  of  city  government,”  which 
abandons  completely  the  distinction  between  the  legis¬ 
lative  and  executive  authorities  in  city  government, 
is  also  evidence  of  the  belief  of  a  large  portion  of  our 
people  that  the  principle  of  the  separation  of  powers 
is  inapplicable  to  the  conditions  existing  in  our 
municipalities. 

The  force  of  the  principle  as  a  rule  of  law  is  also 
being  weakened.  With  the  development  of  the  more 
complex  conditions  characteristic  of  modern  life, 
it  has  been  felt  imperatively  necessary  to  depart 
at  any  rate  from  the  strict  application  of  the  prin¬ 
ciple  in  other  directions,  and  the  courts  have  in  a 
series  of  cases  been  called  upon  to  determine  whether 
the  departures  attempted  in  concrete  cases  are  con¬ 
stitutionally  permissible.  These  decisions  may  be 
classed  under  two  general  heads. 


CONSTITUTIONALITY  OF  POLITICAL  REFORM  215 


In  the  first  place,  the  legislature  has  felt  that  it 
is  impossible  for  it  to  regulate  in  all  their  details  the 
matters  which  at  present  need  regulation.  It  has 
therefore  attempted  to  delegate  to  executive  and 
administrative  authorities  the  power  to  issue  regu¬ 
lations  supplementary  to  and  in  execution  of  the 
statutes  which  it  itself  has  adopted  and  which,  it 
may  perhaps  be  said,  are  more  general  in  character 
than  they  once  were.  In  discussing  this  question 
of  the  right  of  the  legislature  to  delegate  its  power 
of  regulation,  we  must  be  careful  to  distinguish  between 
regulations  of  a  purely  local  and  those  of  a  general 
character.  For  it  is  universally  admitted  by  the 
state  courts  that  the  state  constitutions  must  be 
interpreted  in  the  light  of  our  history.  Inasmuch 
as  it  has  always  been  the  rule  both  in  England  and 
this  country  that  local  corporations  have  the  right 
to  pass  local  by-laws,  the  legislature  is  regarded  as 
having  the  right,  notwithstanding  the  adoption  of 
the  principle  of  the  separation  of  powers,  to  authorize 
the  local  corporations  to  pass  regulations  with  regard 
to  their  local  affairs.1 

When,  however,  we  come  to  the  relations  existing 
between  the  legislature  and  central  executive  or 
administrative  officers,  conditions  are  quite  different. 
For  the  constitutions  have  vested  the  legislative 
power  in  the  legislature  and  the  executive  power  in 
the  President  or  governor,  and  in  some  cases  have 
expressly  forbidden  the  one  authority  to  exercise 
the  power  vested  in  the  other.  The  result  has  been 

1  See  Fox  v.  McDonald,  101  Ala.  51 ;  Morris  v.  City  of  Columbus, 
102  Ga.  792.  As  to  the  extent  to  which  such  decentralization  of  the 
state  government  may  go,  see  infra ,  228. 


21 6  SOCIAL  REFORM  AND  THE  CONSTITUTION 


that  all  the  earlier  and,  indeed,  some  of  the  recent 
cases  have  laid  down  the  rule  without  qualification 
that  the  constitution  impliedly,  at  any  rate,  forbids 
the  legislature  to  delegate  to  executive  or  administra¬ 
tive  officers  the  legislative  power,  and  have  regarded 
as  unconstitutional  the  attempts  referred  to  of  the 
legislature  to  authorize  executive  and  administrative 
authorities  to  issue  regulations.  Such  decisions  are 
rather  more  common  in  the  state  than  in  the  federal 
courts.  There  is,  however,  a  tendency,  particularly 
in  the  recent  decisions  of  the  United  States  Supreme 
Court,  to  recognize  such  action  upon  the  part  of  the 
legislature  as  constitutional.  Congress  has  found  it 
impossible  itself  to  regulate  all  the  administrative 
details  of  the  federal  government,  and,  as  time  goes 
on,  is  more  and  more  frequently,  by  express  provision 
of  statute,  enacting  that  details  shall  be  cared  for 
by  regulations  to  be  issued  by  the  heads  of  the  execu¬ 
tive  departments.  Such  statutes  have  usually  been 
upheld  by  the  Supreme  Court  of  the  United  States 
on  the  theory,  not  that  Congress  may  delegate  legisla¬ 
tive  power,  but  that  if  it  lays  down  the  general  prin¬ 
ciples  which  will  control  the  subject  in  question,  it 
may  vest  the  President  or  the  heads  of  executive 
departments  with  the  power,  through  supplementary 
regulations,  to  regulate  the  details  for  which  Con¬ 
gress  finds  it  difficult,  if  not  impossible,  to  provide.1 
i*  In  some  instances  the  state  courts  take  the  same 
view.  Thus  the  New  York  Court  of  Appeals  holds  2 

1  Boske  v.  Comingore,  177  U.  S.  459 ;  In  re  Kollock,  165  U.  S.  526 ; 
Buttfield  v.  Stranahan,  192  U.  S.  470. 

2  Village  of  Saratoga  Springs  v.  Saratoga  Springs  Gas,  etc.,  Co., 
191  N.  Y.  123. 


CONSTITUTIONALITY  OF  POLITICAL  REFORM  217 


that  it  is  constitutional  for  the  state  legislature  to 
vest  public  service  commissions  with  the  authority 
to  provide  “ reasonable  rates”  which  may  be  charged 
by  public  service  companies.  The  statement  that 
the  rate  shall  be  reasonable  is  supposed  to  be  a  suffi¬ 
cient  statement  of  the  general  principle  to  be  followed 
in  the  regulations.1 

The  branch  of  state  administration  in  which  the 
tendency,  to  recognize  a  power  in  the  legislature  to 
authorize  administrative  authorities  to  issue  regula¬ 
tions  having  the  binding  force  of  law  on  all  individuals 
affected  thereby,  is  most  noticeable,  is  that  of  the 
public  health.  Most  states  at  the  present  time  have 
state  boards  of  health  which  have  the  right  under 
the  law  to  issue  health  regulations  of  force  either 
throughout  the  whole  state  or  in  some  part  thereof. 
By  such  regulations,  when  so  authorized,  these  boards 
may,  e.g.  when  smallpox  is  prevalent,  impose  the 
obligation  to  be  vaccinated  either  upon  all  persons, 
or  upon  pupils  in  schools  under  the  penalty  of  being 
forbidden  to  attend  school.2 

It  would  seem,  therefore,  that  the  more  complex 
conditions  of  modern  American  society,  i.e.  as  com¬ 
pared  with  what  formerly  existed,  have  brought  it 
about  that  large  powers  really  legislative  in  character 
may  be  vested  in  executive  and  administrative  officers 
in  spite  of  the  existence  of  the  principle  of  the  sepa¬ 
ration  of  powers  as  a  doctrine  of  American  constitu¬ 
tional  law,  and  that,  further,  the  end  is  not  yet.  In 
modifying  the  position  which  they  formerly  took, 

1  See  also  Blue  v.  Beach,  155  Ind.  1 21,  as  to  the  power  to  authorize 
administrative  boards  to  issue  regulations. 

2  Blue  v.  Beach,  loc.  cit. 


218  social  reform  and  the  constitution 


the  courts  are  only  bringing  our  law  into  accord  with 
that  of  foreign  countries,  where  such  ordinance  powers 
have  for  a  long  time  been  regarded  as  a  necessary 
adjunct  of  executive  or  administrative  authority. 

In  the  second  place,  it  has  been  deemed  desirable 
to  vest  executive  or  administrative  authorities  with 
large  discretion  in  the  performance  of  acts  of  special 
individual  application  which  have  an  important  effect 
on  individual  rights.  Here  again  the  federal  courts 
have  perhaps  gone  farther  than  the  state  courts 
in  regarding  as  constitutional  statutes  which  attempt 
to  confer  such  powers  upon  administrative  officers. 
The  policy  of  the  government  of  the  United  States 
within  the  last  few  years  has  been  to  exclude  from 
entrance  into  the  country  certain  classes  of  aliens, 
particularly  the  Chinese,  and  the  courts  have  regarded 
as  due  process  of  law  very  arbitrary  action  upon  the 
part  of  federal  administrative  officers  when  authorized 
thereto  by  Congress.  At  the  present  time  administra¬ 
tive  officers  may  decide  finally  without  appeal  to  the 
courts  such  questions  as  whether  a  Chinaman  is 
authorized  under  the  law  to  enter  the  country,  even 
where  the  claim  to  enter  is  based  upon  the  allegation 
that  the  would-be  immigrant  is  a  natural-born  Ameri¬ 
can  citizen.1  The  same  rule  has  been  applied  in  the 
case  of  the  attempted  importation  into  the  country  of 
articles  which  have  been  found  by  an  administrative 
officer,  in  accordance  with  the  statute,  to  be  forbidden 
the  right  of  importation,  while  in  the  case  of  an  alleged 
attempt  to  use  the  post  office  for  a  purpose  forbidden 
by  law,  it  has  been  held  that  statutes  giving  power 

1  United  States  v.  Ju  Toy,  198  U.  S.  25 3 ;  see  also  Lem  Moon  Sing 
r._United  States,  158  U.  S.  538. 


CONSTITUTIONALITY  OF  POLITICAL  REFORM 


219 


to  postal  officials  to  deny  the  use  of  the  mails  to  persons 
found  by  such  officers  to  be  improperly  using  the  mails, 
vest  powers  of  final  decision  in  such  officers.1  Perhaps 
the  strongest  case  is  the  one  recently  decided 2  in 
which  it  was  held  that  it  was  constitutional  for  Con¬ 
gress  to  grant  to  an  administrative  officer  the  power 
to  impose  an  administrative  penalty  in  the  nature 
of  a  fine  upon  a  steamship  company  which  such 
officer  had  decided  had  willfully  violated  the  law  pro¬ 
hibiting  the  bringing  to  this  country  of  any  alien 
afflicted  with  a  loathsome  disease.3 

In  the  states  such  powers  are  rarely  given  to  admin¬ 
istrative  officers  except  in  health  and  tax  matters, 
but  in  these  cases  are  sometimes,  particularly  in  tax 
cases,  regarded  as  constitutionally  granted  if  a  pre¬ 
vious  hearing  has  been  accorded  to  the  person  affected 
by  the  action  of  the  administrative  officer.4 

Apart  from  the  sanitary  and  tax  administration,  — 
and  even  here  it  should  be  said  that  the  action  of 
health  officers  is  not  usually  regarded  as  final  and 
conclusive,  but  is  often  subject  in  one  way  or  another 
to  judicial  review,5  —  the  courts  do  not  favor  the  grant 
of  such  judicial  or  quasi-judicial  powers  to  adminis¬ 
trative  officers.  Thus  the  attempt  to  give  to  admin¬ 
istrative  officers  the  power  to  determine  the  question 

1  Buttfield  v.  Stranahan,  192  U.  S.  470;  Bates  &  Guild  Co.  v 
Payne,  194  U.  S.  107. 

2  Oceanic  Steam  Navigation  Co.  v.  Stranahan,  214  U.  S.  520. 

3  See  also  on  the  general  principle,  Union  Bridge  v.  United  States, 
204  U.  S.  364;  Monongahela  Bridge  Co.  v.  United  States,  216  U.  S. 
177. 

4  Raymond  v.  Fish,  51  Conn.  80;  Metropolitan  Board  of  Health 
v.  Heister,  37  N.  Y.  661 ;  Barhyte  v.  Shepherd,  35  N.  Y.  238;  Palmer 
v.  McMahon,  133  U.  S.  660. 

6  See  Lowe  v.  Conroy,  120  Wis.  151. 


220  SOCIAL  REFORM  AND  THE  CONSTITUTION 


of  land  titles  under  a  statute  providing  for  the  so- 
called  Torrens  system  of  registering  such  titles  has 
been  held  to  be  unconstitutional,  because  attempting 
to  confer  judicial  power  upon  an  administrative 
officer.1  Furthermore,  the  fifth  and  fourteenth  amend¬ 
ments  of  the  United  States  constitution,  the  one 
limiting  the  United  States,  the  other,  the  state  govern¬ 
ments,  prevent  the  respective  governments  from 
depriving  a  person  of  his  life,  liberty,  or  property 
without  due  process  of  law.  This  process  must  in 
certain  cases  be  judicial  process,  as  in  the  case  of  the 
forfeiture  of  property  of  great  value.2  The  attempt 
to  confer  on  administrative  officers  power  to  forfeit 
such  property  summarily  is  therefore  improper.  Thus, 
again,  one  may  not  be  imprisoned  for  contempt  except 
by  judicial  process. 3 

Attention  should,  however,  be  called  to  the  fact 
that  early  in  the  history  of  our  government  it  was 
decided  that  the  due  process  of  law,  without  which 
no  one  can  be  deprived  of  his  life,  liberty,  or  property, 
was  not  necessarily  judicial  process,  but  might  be 
administrative  process.  These  cases  deal  almost 
entirely  with  attempts  upon  the  part  of  the  govern¬ 
ment  to  recover  balances  either  due  from  revenue 
officers  or  for  taxes,  and  the  decisions  are  largely,  if 
not  entirely,  based  upon  the  idea  that,  such  summary 
administrative  methods  having  always  been  employed 
in  these  cases,  the  constitutional  provision  requiring 


1  People  v.  Chase,  165  Ill.  527. 

2  Cf.  Lawton  v.  Steele,  152  U.  S.  133. 

3  Langenberg  v.  Decker,  131  Ind.  471.  See  also  Railway  Co.  v. 
Minnesota,  134  U.  S.  418,  where  it  would  seem  to  be  held  that  rail¬ 
way  rates  may  not  be  fixed  by  administrative  process. 


CONSTITUTIONALITY  OF  POLITICAL  REFORM  2  21 


due  process  of  law  must  be  regarded  as  having  been 
adopted  with  such  practices  in  mind.1 

It  may  therefore  safely  be  said  that  a  tendency 
is  noticeable  in  the  decisions  of  the  courts,  particu¬ 
larly  with  regard  to  those  parts  of  our  administrative 
system  which  present  the  most  complex  and  difficult 
problems,  to  abandon  certainly  the  strict  application 
of  the  principle  of  the  separation  of  powers  whenever 
the  demand  for  administrative  efficiency  would  seem 
to  make  such  action  desirable,  and  it  may  be  expected 
that  this  tendency  will  continue  and  even  increase 
in  force  if  it  is  apprehended  that  even  conservative 
social  reform  is  impossible  under  the  former  conception 
of  the  proper  relations  of  governmental  authorities. 
If  the  state  courts  oppose  these  attempts  to  depart 
from  the  principle  of  the  separation  of  powers,  it  is 
altogether  probable  that  state  constitutions  will 
be  amended  in  those  particulars  where  amendment 
in  this  direction  seems  specially  desirable.  Thus 
Michigan  has  amended  her  constitution  so  as  to  per¬ 
mit  provision  to  be  made  by  the  legislature  for  indeter¬ 
minate  sentences,  a  law  providing  for  which  had  been 
held  unconstitutional  as  vesting  judicial  power  in 
nonjudicial  authorities.2  It  is,  of  course,  possible 
that  such  amendments  might  be  regarded  by  the  state 
courts  as  improper  under  the  fourteenth  amendment 
of  the  constitution  of  the  United  States  providing 
that  no  one  shall  be  deprived  of  his  liberty  without 


1  Murray’s  Lessee  v.  Hoboken  Land  &  Improvement  Co.,  18  How. 
U.  S.  272 ;  Commonwealth  v.  Byrne,  20  Grattan,  165. 

2  See  In  re  Manaca,  146  Mich.  697,  and  other  cases  cited  in  Dodd, 
“The  Growth  of  Judicial  Power,”  Pol .  Sci.  Quar.y  Vol.  XXV,  pp.  193, 
202. 


222  SOCIAL  REFORM  AND  THE  CONSTITUTION 


due  process  of  law,  but,  as  has  been  pointed  out,  Con¬ 
gress  may  provide  for  an  appeal  from  such  decisions 
to  the  Supreme  Court  of  the  United  States,1  and  that 
body  has  in  a  number  of  instances  expressed  its 
opinion  that  due  process  of  law  as  applied  to  liberty 
may  mean  different  things  at  different  times  and  in 
different  conditions.2  Perhaps  the  most  remarkable 
statement  of  this  character  made  in  a  Supreme  Court 
opinion  is  that  made  by  Mr.  Justice  Mathews  in 
Hurtado  v.  California,3  where  it  was  held  that  due 
process  of  law  permitted  the  presentation  of  criminal 
charges  by  information  and  did  not  make  indictment 
necessary.  In  the  course  of  the  opinion  it  was 
said :  — 

“The  constitution  of  the  United  States  was  ordained,  it  is 
true,  by  descendants  of  Englishmen,  who  inherited  the  traditions 
of  English  law  and  history ;  but  it  was  made  for  an  undefined 
and  expanding  future  and  for  a  people  gathered  and  to  be 
gathered  from  many  nations  and  of  many  tongues.  And  while 
we  take  just  pride  in  the  principles  and  institutions  of  the 
common  law,  we  are  not  to  forget  that  in  lands  where  other  sys¬ 
tems  of  jurisprudence  prevail,  the  ideas  and  processes  of  civil 
justice  are  also  not  unknown.  Due  process  of  law,  in  spite  of 

1  Supra  p.  31. 

2  See  Ughbanks  v.  Armstrong,  208  U.  S.  481 ;  and  Dreyer  v. 

Illinois,  187  U.  S.  71,  both  upholding  the  constitutionality  of  inde¬ 
terminate  sentences.  In  the  latter  case  the  court  says:  “Whether 
the  legislative,  executive,  and  judicial  powers  of  a  state  shall  be  kept 
altogether  distinct  and  separate,  or  whether  collections  of  persons 
belonging  to  one  department  may,  in  respect  to  some  matters,  exert 
powers  which,  strictly  speaking,  pertain  to  another  department  of 
government  is  for  the  state  to  determine.  And  its  determination 
one  way  or  the  other  cannot  be  an  element  in  the  inquiry  whether  the 
due  process  of  law  prescribed  by  the  fourteenth  amendment  has  been 
respected  by  the  state  or  its  representatives  when  dealing  with  mat¬ 
ters  involving  life  or  liberty.’^  s  no  U.  S.  516. 


CONSTITUTIONALITY  OF  POLITICAL  REFORM 


223 


the  absolutism  of  continental  governments,  is  not  alien  to  that 
code  which  survived  the  Roman  Empire  as  the  foundation  of 
modern  civilization  in  Europe  and  which  has  given  us  that  funda¬ 
mental  maxim  of  distributive  justice  —  suutn  cuique  tribuere. 
There  is  nothing  in  Magna  Charta,  rightly  construed  as  a  broad 
charter  of  public  right  and  law,  which  ought  to  exclude  the  best 
ideas  of  all  systems  and  of  every  age ;  and  as  it  was  the  charac¬ 
teristic  principle  of  the  common  law  to  draw  its  inspiration  from 
every  fountain  of  justice,  we  are  not  to  assume  that  the  sources 
of  its  supply  have  been  exhausted.  On  the  contrary,  we  should 
expect  that  the  new  and  various  experiences  of  our  own  situa¬ 
tion  and  system  will  mold  and  shape  it  into  new  and  not  less 
useful  forms.” 1 

It  is  difficult  to  believe  after  reading  such  words 
that  the  Supreme  Court  will  take  so  narrow  a  view 
of  the  due  process  of  law  required  of  the  states  by 
the  fourteenth  amendment  as  to  cause  it  to  declare 
unconstitutional  a  state  law  or  state  constitutional 
amendment  merely  providing  for  a  departure  from 
the  principle  of  the  separation  of  powers  in  a  state 
government. 

This  consideration  of  the  question  whether  the  con¬ 
stitution  of  the  United  States  requires  that  the  state 
governments  shall  be  based  upon  the  principle  of 
the  separation  of  powers  is  liable  at  any  moment  to 
become  an  extremely  important  one.  For  the  pro¬ 
posal  has  already  been  made  in  one  of  the  states  of 
the  Northwest  to  substitute  for  the  present  form  of 
state  government  a  form  resembling  in  its  essential 
characteristics  the  commission  form  of  government, 
which  has  been  so  widely  applied  in  the  case  of 
cities. 

1  See  also  Missouri  v.  Lewis,  101  U.  S.  22,  for  a  somewhat  similar 
opinion  from  Mr.  Justice  Bradley,  and  Willoughby,  “The  Constitu¬ 
tional  Law  of  the  United  States,”  Chapter  XL VI. 


224  SOCIAL  REFORM  AND  THE  CONSTITUTION 


II.  Republican  Form  of  Government 

Another  important  change  in  the  form  of  state 
government  which  seems  to  be  growing  in  popular 
favor  is  to  be  noticed  in  the  adoption  of  the  referen¬ 
dum,  and  initiative  and  recall.  These  devices,  while 
perhaps  strictly  speaking  not  violative  of  the  prin¬ 
ciple  of  the  separation  of  powers,  certainly  modify 
very  seriously  old-time  conceptions  of  legislative 
power.  Generally  speaking,  it  has  been  held  that 
in  the  absence  of  special  state  constitutional  provi¬ 
sion,  the  legislature  may  not  delegate  to  the  people 
of  the  state  the  right  to  legislate,1  but  that  under 
similar  conditions  and  because  of  historical  considera¬ 
tions  powers  of  local  legislation  may  be  vested  by 
the  legislature  in  local  corporations,  in  the  people 
thereof,  or  in  local  officers.2  To  obviate  the  constitu¬ 
tional  objection  to  the  referendum  and  initiative,  as 
applied  to  the  people  of  the  state  generally,  some  of  the 
more  recent  state  constitutions  have  either  authorized 
the  legislature  to  provide  for  these  methods  of  legis¬ 
lation,  or  have  made  express  provision  for  them  in 
either  state  or  local  matters,  or  both,  and  both  legis¬ 
latures  and  constitutions  have  in  a  few  instances 
provided  for  the  recall,  particularly  in  municipal 
government. 

Where  these  methods  of  political  action  have  been 
provided  for  in  the  state  constitutions,  naturally  no 
question  as  to  their  constitutionality  from  the  point 

1  Barto  v.  Himrod,  8  N.  Y.  483. 

2  State  v.  Farkner,  94  Iowa,  1 ;  see  Oberholtzer,  “The  Referendum 
in  America.”  See  also  Lindsay,  “Reciprocal  Legislation,”  Pol. 
Sci.  Quar.,  Vol.  XXV,  p.  435. 


CONSTITUTIONALITY  OF  POLITICAL  REFORM  225 


of  view  of  the  state  constitution  may  be  raised.  It 
has,  however,  sometimes  been  contended  that  they 
are  unconstitutional  from  the  point  of  view  of  the 
federal  constitution,  either  as  inconsistent  with  the 
republican  form  of  government  which  the  United 
States  is,  under  the  federal  constitution,  to  guarantee 
to  every  state,1  or  as  resulting  in  depriving  some  per¬ 
son  of  property  without  due  process  of  law,  contrary 
to  the  provisions  of  the  fourteenth  amendment. 

Are  these  new  democratic  devices  unconstitutional 
as  inconsistent  with  a  republican  form  of  government  ? 
What  is  a  republican  form  of  government  is  not 
defined  in  the  constitution,  nor  is  it  stated  therein 
what  authority  in  the  government  has  the  power  of 
determining  the  question.  The  Supreme  Court  in 
Luther  v.  Borden2  has,  however,  indicated  that  it 
is  Congress  to  which  the  power  of  determination  is 
given.  Mr.  Chief  Justice  Taney,  who  delivered  the 
opinion  of  the  court  in  this  case,  said  :  — 

“Under  this  article  of  the  constitution  it  rests  with  Congress 
to  decide  what  government  is  the  established  one  in  a  state. 
For,  as  the  United  States  guarantee  to  each  state  a  republican 
government,  Congress  must  necessarily  decide  what  government 
is  established  in  the  state  before  it  can  determine  whether  it  is 
republican  or  not.  And  when  the  senators  and  representatives 
of  a  state  are  admitted  into  the  councils  of  the  Union,  the  au¬ 
thority  of  the  government  under  which  they  are  appointed,  as 
well  as  its  republican  character,  is  recognized  by  the  proper 
constitutional  authority.  And  its  decision  is  binding  on  every 
other  department  of  the  government  and  could  not  be  ques¬ 
tioned  in  a  judicial  tribunal.”3 

1  Const.  Art.  IV,  Sec.  4.  2  7  How.  1. 

3  See  also  Texas  v.  White,  7  Wall.  700  ;  In  re  Duncan,  139  U.  S. 
449  and  Taylor  v.  Marshall  and  Beckham,  178  U.  S.  548,  approving  the 
view  of  Chief  Justice  Taney. 

Q 


226  SOCIAL  REFORM  AND  THE  CONSTITUTION 

In  another  part  of  the  opinion  he  disapproves  of 
the  contention  that  the  courts  are  not  bound  by  the 
decision  of  Congress  or  its  delegate,  in  the  facts  of 
the  particular  case  the  President,  saying  that  the 
guarantee  of  the  constitution  as  so  interpreted  is 
“a  guarantee  of  anarchy  and  not  of  order.”  These 
quotations  are  further  more  than  dicta.  They  em¬ 
body  one  of  the  essential  rationes  decidendi  in  the  case, 
and  have  therefore  the  force  of  law.  So  that  we  must 
conclude  that  as  yet  the  law  is  that  what  is  a  republi¬ 
can  form  of  government  under  the  United  States 
constitution  is  to  be  determined  by  Congress,  whose 
action  is  binding  upon  the  Supreme  Court.1 

Congress,  up  to  the  present  time,  has  not  taken  action 
as  to  the  initiative,  referendum,  or  recall,  except  by 
admitting  senators  and  representatives  from  states 
where  these  methods  of  political  action  were  adopted 
and  practiced.  If  the  view  of  Mr.  Chief  Justice 
Taney  as  to  the  powers  of  Congress  is  correct,  we  may 
then  say  that  the  referendum,  initiative,  and  recall 
have  been  held  to  be  consistent  with  a  republican 
form  of  government  by  the  only  authority  under  the 
constitution  of  the  United  States  having  the  power 
to  determine  the  question. 

In  a  recent  case,  however,2  the  Supreme  Court 
expresses  obiter  a  doubt  as  to  whether  the  fixing  of 
rates  by  a  local  referendum  ordinance  would  not  be 
a  taking  of  property  without  due  process  of  law,  say¬ 
ing:— 

1  But  see  infra ,  p.  283,  for  certain  expressions  of  the  Supreme 
Court  in  later  decisions  which  perhaps  indicate  its  opinion  that  it 
has  independent  power  in  the  premises. 

2  Home  Telephone  Co.  v.  Los  Angeles,  211  U.  S.  265. 


CONSTITUTIONALITY  OF  POLITICAL  REFORM  227 


“There  are  certainly  grave  objections  to  the  exercise  of  such 
a  power,  requiring  a  careful  and  minute  investigation  of  facts 
and  figures,  by  the  general  body  of  the  people,  however  intelli¬ 
gent  and  right  minded.  But  the  ordinance  [before  the  court] 
was  not  adopted  in  this  manner  in  the  case,  and  it  will  be 
time  enough  for  the  courts  of  the  states  and  of  the  United  States 
to  consider,  when  that  is  done,  whether  the  objections  only  go 
to  the  expediency  of  such  a  method  of  regulation  or  reach  deeper 
and  affect  its  constitutionality.” 

As  under  the  law,  upheld  in  this  decision,  on  peti¬ 
tion  of  fifteen  per  cent  of  the  voters  of  the  city,  any 
ordinance  proposed  had  to  be  submitted  to  the  people 
and  might  be  by  them  adopted,  it  may  be  said  that 
this  case  actually  decided  that  the  existence  of  the 
possibility  of  an  initiative  and  referendum  will  not 
render  a  law  or  ordinance  passed  while  such  possi¬ 
bility  exists  unconstitutional  from  the  point  of  view 
of  the  federal  constitution. 

While  this  case  did  not  decide  that  the  exercise  of 
legislative  power  through  the  initiative  and  referen¬ 
dum  was  or  was  not  constitutional,  it  did  apparently 
indicate  that  in  the  opinion  of  the  court  the  recall 
was  constitutional.  The  court  said  in  this  case  in 
answer  to  the  objection  that  by  the  charter  of  the 
city  twenty-five  per  cent  of  the  electors  might  recall 
a  member  of  the  council  and  require  him  to  stand 
for  election: — ■ 

“Nevertheless,  he  takes  part  in  the  rate-making  function 
under  his  personal  responsibility  as  an  officer,  and  it  cannot  be 
presumed,  as  a  matter  of  law,  that  the  keener  sense  of  dependence 
upon  the  will  of  the  people,  which  this  feature  of  his  tenure  of 
office  brings  to  him,  will  distort  his  judgment  and  sense  of  jus¬ 
tice.  It  would  be  conceivable,  of  course,  that  the  members  of 
the  legislature  themselves  might  be  subjected  to  the  same  process 
of  recall,  but  it  hardly  would  be  contended  that  that  fact  would 


2  28  SOCIAL  REFORM  AND  THE  CONSTITUTION 

lessen  the  legislative  power  vested  in  them  by  the  constitution 
and  laws  of  the  state.” 

It  may  therefore  be  said  that  the  recall,  and  prob¬ 
ably  both  the  initiative  and  referendum  as  well,  are 
constitutional  from  the  point  of  view  of  the  federal 
constitution,  which,  as  interpreted,  offers  no  obstacle 
to  change  from  representative  to  democratic  govern¬ 
ment  if  such  a  change  should  approve  itself  to  the 
people  of  the  United  States. 

In  a  number  of  the  states  in  which  the  referendum, 
initiative,  and  recall  have  been  adopted,  provision  has 
been  made,  usually  in  the  state  constitution,  for  the 
grant  to  cities  of  very  wide  powers  of  local  govern¬ 
ment.  Cities  may  thus  frame  their  own  charters 
themselves,  provide  for  their  own  organization,  and 
determine  their  own  sphere  of  activity.  It  has  some¬ 
times  been  objected  1  that  the  grant  of  powers  of  this 
character  might  result  in  the  practical  formation  of 
a  new  state  within  the  jurisdiction  of  an  existing 
state  which  would  not  be  proper  under  the  United 
States  constitution.2  Such  an  objection  to  what  is 
really  but  a  decentralization  of  the  state  govern¬ 
ment  confounds  the  sovereignty  of  the  state  with 
its  governmental  organization,  and  loses  sight  of 
the  fact  that,  so  long  as  the  people  of  the  state  are 
at  liberty  through  their  power  of  amending  the  state 
constitution  to  provide  at  any  time  for  a  centralization 
of  the  functions  of  state  government  which  by  their 
former  action  they  had  merely  decentralized,  there 
cannot  be  said  to  have  been  a  new  state  formed  in  an 
existing  state.  Furthermore,  the  United  States  Su- 

1  See  e.g.  opinion  in  People  v.  Sours,  31  Col.  369. 

2  Art.  IV,  Sec.  3. 


CONSTITUTIONALITY  OF  POLITICAL  REFORM  229 


preme  Court  has  indicated  its  approval  of  the  consti¬ 
tutionality  of  these  “freeholders’  charters,”  as  they 
are  called,  in  City  of  St.  Louis  v.  Western  Union  Tel¬ 
egraph  Co,1  where  it  said:  — 

“In  pursuance  of  these  provisions  of  the  constitution  a  charter 
was  prepared  and  adopted  and  is  therefore  the  ‘  organic  law 1  of 
the  city  of  St.  Louis,  and  the  powers  granted  by  it,  so  far  as  they 
are  in  harmony  with  the  constitution  and  laws  of  the  state,  and 
have  not  been  set  aside  by  any  act  of  the  general  assembly,  are 
the  powers  vested  in  the  city.  And  this  charter  is  an  organic 
act  and  is  to  be  construed  as  organic  acts  are  construed.  The 
city  is  in  a  very  just  sense  an  ‘imperium  in  imperio.’  Its 
powers  are  self-appointed,  and  the  reserved  control  in  the  general 
assembly  does  not  take  away  this  peculiar  feature  of  its  charter.” 

Most  of  the  demands  for  political  reform,  so  far  as 
that  is  concerned  with  the  mere  forms  of  our  govern¬ 
ment,  can  thus  be  met  under  our  supposedly  rather 
inelastic  constitution.  Amendment  of  state  con¬ 
stitutions,  legislative  action,  judicial  decision,  and 
change  in  habits  of  political  action  all  contribute  to 
permit  us  to  adapt  our  political  system  to  the  changes 
in  social  conditions  which  have  necessarily  accom¬ 
panied  our  growth  as  a  nation. 

The  point  in  which  change  will  probably  be  most 
difficult,  and  in  which  change  is  for  some  reasons  most 
imperative,  is  in  the  extent  of  the  power  vested  in 
executive  and  administrative  offices.  The  conception 
of  the  due  process  of  law  required  by  the  fifth  and 
fourteenth  amendments  in  order  that  any  person  may 
be  deprived  of  his  life,  liberty,  or  property,  is  based 
more  than  it  should  be  on  the  simple  conditions  of  life 
which  existed  when  the  country  was  established.  Not- 


1  149  U.  S.  465. 


230  SOCIAL  REFORM  AND  THE  CONSTITUTION 

withstanding  the  fact  that  historically  due  process  of 
law  was  not  necessarily  judicial  process,  the  courts 
have  been  reluctant  to  extend  the  rule  that  one  may 
be  deprived  of  his  life,  liberty,  or  property  by  adminis¬ 
trative  process  beyond  the  concrete  instances  for  which 
historical  justification  can  be  found.  This  view  is, 
however,  more  characteristic  of  the  state  courts  than 
of  the  Supreme  Court  of  the  United  States.  It  is  not, 
therefore,  as  has  been  pointed  out,  an  insuperable 
obstacle  to  change.  The  result  is  that  efficient  ad¬ 
ministrative  action,  particularly  in  the  state  govern¬ 
ments,  is  often  impaired  either  by  the  necessity  for  judi¬ 
cial  process  or  by  the  extensive  judicial  control  over 
administrative  action  which  is  often  regarded  as  a 
necessary  part  of  the  due  process  required  by  the 
constitution.  Judicial  review  in  collateral  proceedings 
of  the  determinations  of  administrative  officers,  such 
as  health  officers  and  public  service  commissioners  and 
the  restraint  of  administrative  action  through  the  issue 
of  the  injunction  to  such  officers  by  the  courts,  all  tend 
to  make  our  administration  less  effective  than  it 
should  be. 

The  attitude  of  the  courts  toward  this  question  is 
in  many  cases  undoubtedly  due  to  the  informality  of 
existing  administrative  procedure.  Indeed,  this  in¬ 
formality  is  in  many  instances  so  great  as  to  result  in 
an  almost  complete  lack  of  any  procedure  at  all  to  be 
followed  by  administrative  officers  in  the  making  of 
the  determinations  which  the  courts 1  insist  upon 
reviewing.  When  we  develop  an  administrative  pro¬ 
cedure  which  is  reasonably  regardful  of  private  rights, 

1  Cf.  Bowman,  “American  Administrative  Tribunals,”  Pol.  Sci. 
Quar.,  Vol.  XXI,  p.  620. 


CONSTITUTIONALITY  OF  POLITICAL  REFORM  23 1 

1  i  ' ’ 

e.g.  gives  notice  and  a  hearing  to  the  person  affected 
by  the  administrative  determination,  it  may  well  be 
that  the  courts  will  change  their  attitude  and  come 
to  the  conclusion  that  the  changed  and  complex  con¬ 
ditions  of  modern  life  in  comparatively  congested 
districts,  such  as  those  in  which  we  are  even  now 
living  in  the  United  States,  should  have  an  effect  both 
on  the  constitutional  rights  of  individuals  and  on  the 
powers  and  procedure  of  administrative  authorities 
in  the  same  way  that  the  peculiar  history  and  economic 
and  geographical  conditions  of  the  people  living  in  our 
tropical  dependencies  were  permitted  to  have  an  in¬ 
fluence  on  the  position  which  those  people  were  recog¬ 
nized  as  occupying  in  our  constitutional  law.  How 
this  may  be  done  need  not  now  be  suggested,  much  less 
pointed  out,  but  we  may  with  confidence  trust  that 
a  way  can  be  found  by  that  court  which  formulated 
the  wise  and  far-seeing  constitutional  policy  embodied 
in  the  Insular  cases,  provided,  of  course,  that  that  court 
is  desirous  of  solving  the  problem  in  the  way  in  which 
other  nations  in  conditions  similar  to  those  in  which 
we  are  now  living  have  attempted  to  solve  it. 

III.  Government  Ownership 

Changes  in  the  character  of  our  government  may 
arise,  however,  not  only  as  a  result  of  modifications 
of  the  relations  of  the  different  public  authorities,  one 
with  another,  but  as  well  because  of  an  increase  in 
the  functions  to  be  discharged  by  those  authorities. 
Let  us  therefore  consider  the  constitutionality  of 
attempts  to  increase  the  functions  of  government 
through  the  adoption  of  a  policy  of  public  ownership 


232  SOCIAL  REFORM  AND  THE  CONSTITUTION 


and  operation.  It  is  hardly  necessary  to  point  out 
that  the  powers  of  a  state  in  the  American  system  are 
not  to  any  serious  extent  dependent  upon  the  federal 
constitution.  For  a  state  possesses  all  powers  which 
have  not  been  expressly  or  impliedly  conferred  upon 
the  government  of  the  United  States  by  the  federal 
constitution,  and  which  the  states  have  not  by  that 
instrument  been  forbidden  to  exercise.  The  powers 
which  states  may  not  constitutionally  exercise  are, 
in  the  first  place,  powers  which  at  the  time  of  the 
adoption  of  the  federal  constitution  it  was  believed 
experience  had  shown  would  be  more  advantageously 
exercised  by  the  federal  government,  such  as  the  power 
to  establish  post  offices  and  to  regulate  foreign  and 
interstate  commerce;  and,  in  the  second  place,  powers 
whose  exercise  it  was  believed  imperiled  private 
rights,  such  as  the  power  to  pass  a  law  impairing  the 
obligation  of  a  contract. 

The  most  important  provisions  of  the  constitution 
of  the  United  States  which  may  possibly  prevent  a 
state  from  entering  upon  a  regime  of  public  owner¬ 
ship  are  those  granting  powers  to  Congress,  such  as 
the  power  to  establish  post  offices  and  the  commerce 
power.  But  as  these  provisions,  while  impliedly 
denying  powers  to  the  states,  for  the  most  part  posi¬ 
tively  grant  them  to  the  United  States,  they  are  not 
in  reality  an  obstacle  to  the  adoption  of  a  policy  of 
public  ownership. 

There  is,  however,  one  clause  in  the  constitution 
which,  while  conceivably  restrictive  of  the  powers  of 
the  states,  does  not  enlarge  the  powers  of  the  federal 
government.  This  is  the  clause  to  which  reference 
has  been  made  and  which  declares  that  the  United 


CONSTITUTIONALITY  OF  POLITICAL  REFORM 


233 


States  shall  guarantee  to  every  state  a  republican 
form  of  government.  What  the  purport  of  this  pro¬ 
vision  is,  has  not  as  yet  been  exactly  determined  by 
judicial  decision.  At  first  it  was  apparently  believed, 
as  has  been  shown,  that  the  authority  in  the  United 
States  government  under  this  clause  was  vested  in  the 
Congress,  and  that  body  passed  laws  which  as  inter¬ 
preted  by  the  Supreme  Court  vested  large  powers  in 
the  President  to  determine  in  case  of  trouble  in  any 
state  which  of  the  contending  governments  was  re¬ 
publican  in  character.1  But  in  one  or  two  recent 
cases  the  Supreme  Court  has  shown  a  tendency  to 
adopt  the  theory  that  it  itself  has  powers  under  this 
provision  to  some  extent  independent  of  any  action 
which  Congress  may  take.  Thus,  in  Miner  v.  Hap- 
persett 2  the  court  says  that  “the  guaranty  necessarily 
implies  a  duty  on  the  part  of  the  states  themselves  to 
provide  such  a  government,”  apparently  intimating 
that  it  has  some  power  of  supervision  in  this  respect, 
although  it  holds  that  a  state  which  does  not  give  the 
suffrage  to  women  may  still  have  a  republican  form 
of  government.  Again,  in  South  Carolina  v.  United 
States,3  it  says  :  “There  is  a  large  and  growing  move¬ 
ment  in  this  country  in  favor  of  the  acquisition  and 
management  by  the  public  of  what  are  termed  public 
utilities,  including  not  merely  therein  the  supply  of 
gas  and  water,  but  also  the  entire  railroad  system,”  and 
asks  the  question,  “Should  the  state  by  taking  into 
possession  these  public  utilities  lose  its  republican 
form  of  government?”  Of  course,  these  statements 
are  merely  obiter  dicta ,  but  they  certainly  evidence  a 

1  Luther  v.  Borden,  7  How.  1.  See  also  Texas  v.  White,  7  Wall.  700, 
supra,  p.  225.  2  21  Wall.  162.  2  199  U.  S.  437 


234  SOCIAL  REFORM  AND  THE  CONSTITUTION 


belief  upon  the  part  of  the  court  that  it  has  some 
power  in  the  premises  which  is  independent  of  Con¬ 
gress.  It  is  difficult,  however,  to  believe  that  the 
Supreme  Court,  even  if  it  should  decide  that  it  had 
jurisdiction,  would  make  the  republican  or  non¬ 
republican  character  of  the  government  of  a  state 
depend  upon  the  extent  of  the  functions  which  it  dis¬ 
charges.  The  term  “  republican  ”  would  seem  to 
refer  to  the  form  of  the  government  rather  than  to  the 
extent  of  its  activity. 

Apart,  then,  from  the  rather  indefinite  control  over 
the  states  which  the  Congress  of  the  United  States 
or  the  Supreme  Court  may  possess  under  the  clause 
of  the  federal  constitution,  in  which  the  United  States 
guarantees  to  every  state  a  republican  form  of  govern¬ 
ment,  the  states  have  the  right  to  enter  upon  a  policy 
of  public  ownership.  The  only  limitations  are  to  be 
found  where  they  have  contracted  this  right  away. 
Where  a  city  clearly  binds  itself  not  to  compete  with 
a  company  to  which  it  has  granted  a  franchise  having 
a  definite  fixed  term,  it  loses  the  power  which  otherwise 
it  possesses.1  But  its  intention  to  make  such  a  con¬ 
tract  must  be  clear  and  unmistakable,2  and  its  power 
to  make  such  a  contract  must  be  unquestionable.3 

The  United  States  government  is  also  authorized  by 
the  constitution  to  adopt  a  policy  of  public  ownership 
as  a  necessary  and  proper  means  for  carrying  into 
effect  any  power  conferred  upon  it  by  the  constitution. 
Thus  it  may  construct  and  probably  operate  means 

1  Walla  Walla  v.  Walla  Walla  Water  Co.,  172  U.  S.  1 ;  Vicksburg  v. 
Vicksburg  Water  Co.,  202  U.  S.  453. 

2  Knoxville  Water  Co.  v.  Knoxville,  200  U.  S.  22. 

*  Home  Telephone  Co.  v.  Los  Angeles,  21 1  U.  S.  265. 


CONSTITUTIONALITY  OF  POLITICAL  REFORM  235 


of  transportation  like  wagon  roads 1  and  canals.2 
Inasmuch  as  Congress  is  the  judge  as  to  what  are 
necessary  and  proper  means,3  it  is  difficult  to  find 
any  constitutional  objection  to  a  policy  of  public 
ownership,  provided  it  is  adopted  as  a  means  to  carry 
into  effect  a  power  granted  by  the  constitution,  such 
as  the  power  to  regulate  commerce.  Thus,  there  is 
no  obstacle  to  be  found  in  the  United  States  con¬ 
stitution  to  a  policy  of  government  ownership  on  the 
part  of  either  the  state  or  the  United  States  govern¬ 
ments. 

Finally,  the  general  provisions  of  the  state  consti¬ 
tutions  would  not  seem  to  limit  the  powers  of  the  state 
governments  in  this  respect  so  far  as  the  exercise  of 
these  powers  does  not  result  in  a  compulsion  used  by 
the  state  upon  the  individual  to  avail  himself  of  the 
opportunities  afforded  by  the  activity  of  the  govern¬ 
ment.  States  and  municipalities  with  state  authoriza¬ 
tion  have  undertaken  all  sorts  of  quasi-commercial 
enterprises  either  directly  or  through  the  medium  of 
corporations  of  which  the  state  was  the  sole  stock¬ 
holder.  Thus  the  states  or  the  municipalities  have 
built  and  operated  canals  and  railways,  waterworks, 
electric  light  and  gas  works,  and  have  organized  banks 
and  quasi-commercial  monopolies,  such  as  the  dis¬ 
pensaries  of  South  Carolina,  and  their  powers  have 
never  been  denied  except  in  one  or  two  instances. 
One  is  to  be  found  in  the  case  of  a  bill  before  the  Massa¬ 
chusetts  legislature  providing  that  the  city  of  Boston 
might  establish  a  public  coal  yard.  In  accordance 

1  Indiana  v.  United  States,  148  U.  S.  148. 

2  Wilson  v.  Shaw,  204  U.  S.  24. 

*  McCulloch  v.  Maryland,  4  Wheaton,  316. 


236  SOCIAL  REFORM  AND  THE  CONSTITUTION 


with  the  provision  in  the  Massachusetts  constitution, 
the  opinion  of  the  Supreme  Court  was  asked,  and  it 
declared  its  opinion  that  such  act  was  unconstitutional.1 
Again,  the  Supreme  Court  of  Michigan  refused  to 
permit  the  city  of  Detroit  to  adopt  a  policy  of  munic¬ 
ipal  ownership  and  operation  of  street  railways  be¬ 
cause  of  the  provision  in  the  state  constitution  which 
forbade  the  state  to  engage  in  internal  improvements.2 
The  right  to  establish  and  operate  public  waterworks,3 
gas  works,4  electric  light  works  5  and  railways  6  has 
been  recognized  by  judicial  decision.7 

There  would  seem,  therefore,  to  be  no  constitutional 
objection  to  the  provision  by  the  state,  either  in  its 
central  or  its  local  organization,  of  a  system  of  public 
insurance  against  death,  sickness,  accident,  or  fire 
which  was  based  on  the  voluntary  cooperation  of  indi¬ 
viduals,  or  perhaps  classes  of  individuals,  such,  for  ex¬ 
ample,  as  the  system  adopted  in  New  Zealand.  The 
only  possible  objection  which  might  be  made  to  such 
a  system  would  be,  in  case  any  resort  to  public  funds 
were  made,  that  the  power  of  taxation  through  whose 
exercise  such  funds  were  obtained  was  being  used  for 
a  private  purpose.  This  subject  will  be  discussed  in 
another  chapter.  It  is  enough  to  say  here  that  it  is 
improbable  that  the  Supreme  Court  of  the  United 
States  would  reverse  the  decisions  of  the  state  courts 

1  Opinion  of  the  Justices,  182  Mass.  665. 

2  Atty.  Gen.  v.  Pingree,  113  Mich.  395. 

3  Bailey  v.  Mayor,  3  Hill,  433. 

4  Western  Savings  Fund  Society  v.  Philadelphia,  31  Pa.  St.  175. 

6  Jacksonville  Electric  Light  Co.  v.  Jacksonville,  36  Fla.  229. 

6  Printing  Association  v.  Rapid  Transit  Corns.,  152  N.  Y.  257; 
Walker  v.  Cincinnati,  21  Ohio,  St.  14. 

7  See  also  Pond,  ‘‘Municipal  Control  of  Public  Utilities,”  Columbia 
University  Studies  in  History ,  etc.  Vol.  XXV,  No.  1,  Chapter  X. 


CONSTITUTIONALITY  OF  POLITICAL  REFORM  237 

in  favor  of  the  constitutionality  of  such  a  system,  since 
it  has  more  than  once  evidenced  its  belief  that  while 
not  actually  concluded  by  such  decisions,  it  should 
accord  them  the  greatest  possible  respect.  Further¬ 
more,  the  Supreme  Court  has  indicated  that  the 
character  of  the  purpose  of  taxation  as  public  or  not, 
is  in  large  measure  dependent  upon  the  local  conditions 
in  which  it  is  exercised.  It  is  possible  that  the  state 
courts  would  not  take  so  liberal  a  view  either  because 
of  the  peculiar  and  more  stringent  provisions  of  state 
constitutions,  or  because  they  are  less  reluctant  than 
is  the  Supreme  Court  to  declare  acts  of  the  state 
legislatures  unconstitutional.  But  it  is  to  be  remem¬ 
bered  that  for  reasons  already  set  forth  the  decisions 
of  state  courts  are  not  really  serious  permanent 
obstacles  to  social  reform. 

It  is  perhaps  desirable  to  consider  for  a  few  moments 
the  constitutionality  of  schemes  of  state  insurance 
in  which  insurance  is  compulsory  rather  than  volun¬ 
tary,  as  is  the  case  in  Germany,  where  an  obligation 
is  imposed  on  both  employer  and  employed  to  pro¬ 
vide  for  the  insurance  of  persons  employed  in  certain 
occupations.  As  no  such  scheme  has  ever  been 
adopted  in  the  United  States,  we  naturally  have  few, 
if  any,  decisions  exactly  in  point.  The  Supreme  Court 
of  Ohio  has  held,  however,  that  the  compulsory  re¬ 
tention  of  a  portion  of  the  salaries  of  teachers  for  the 
formation  of  a  pension  fund  is  unconstitutional  under 
a  constitution  which  provided  for  uniformity  of  taxa¬ 
tion,  since  it  in  effect  imposed  a  tax  on  a  special  class 
in  the  community.1  Generally,  the  formation  of 
official  pension  funds  in  this  manner  is  regarded  as 
1  State  v.  Hubbard,  65  O.  St.  574. 


238  SOCIAL  REFORM  AND  THE  CONSTITUTION 


perfectly  proper.  For  the  amount  of  pay  deducted 
is  considered  as  always  being  in  the  public  treasury, 
and  therefore  as  public  rather  than  private  property.1 
The  recognition  of  the  propriety  of  deduction  of  pay 
for  the  formation  of  official  pension  funds  does  not, 
however,  necessarily  involve  the  recognition  of  the 
propriety  of  the  compulsory  deduction  from  the  wages  or 
salary  of  private  persons.  For  deductions  from  official 
salaries  may  be  justified  as  an  exercise  of  the  power 
which  all  governments  have  over  their  own  officers  — 
a  power  which  might  not  be  regarded  under  our  sys¬ 
tem  of  constitutional  restrictions  as  properly  exercised 
over  ordinary  citizens. 

It  would  appear  to  be  possible,  however,  to  justify 
such  deductions  under  the  power  of  taxation  if  there 
were  no  special  provisions  in  the  constitutions  requir¬ 
ing  a  strict  uniformity  of  taxation.  Probably  the 
fourteenth  amendment  would  not  be  regarded  as 
prohibiting  such  taxation.  For  the  Supreme  Court 
has  time  and  again  announced  the  rule  that  that  amend¬ 
ment  does  not  prevent  classification  of  a  reasonable 
character.  And  it  is  difficult  to  see  how  it  would 
be  unreasonable  to  impose  a  special  tax  on  a  specified 
class  of  persons  whose  occupation  made  it  appear  to 
the  legislature  that  it  was  desirable  that  they  be 
taxed.  In  Bell’s  Gap  Railroad  Company  v.  Pennsyl¬ 
vania2  in  which  it  was  decided  that  a  state  might  select 
for  taxation  railway  bonds  owned  by  resident  holders 
and  might  make  the  railway  company  its  agent  for 
the  collection  of  the  tax  by  obliging  it  to  deduct  the 
tax  from  the  interest  due  the  bondholder,  the  court 
said:  — 

1  See  Pennie  v.  Reis,  182  U.  S.  464.  *  134  U.  S.  237. 


CONSTITUTIONALITY  OF  POLITICAL  REFORM  239 


“  The  provision  in  the  fourteenth  amendment,  that  no  state 
shall  deny  to  any  person  within  its  jurisdiction  the  equal  pro¬ 
tection  of  the  laws,  was  not  intended  to  prevent  a  state  from 
adjusting  its  system  of  taxation  in  all  proper  and  reasonable 
ways.  It  may,  if  it  chooses,  exempt  certain  classes  of  property 
from  any  taxation  at  all,  such  as  churches,  libraries,  and  the  prop¬ 
erty  of  charitable  institutions.  It  may  impose  different  specific 
taxes  upon  different  trades  and  professions,  and  may  vary  the 
rates  of  excise  upon  various  products ;  it  may  tax  visible  prop¬ 
erty  only,  and  not  tax  securities  for  payment  of  money ;  it  may 
allow  deductions  for  indebtedness,  or  not  allow  them.  All  such 
regulations,  and  those  of  like  character,  so  long  as  they  proceed 
within  reasonable  limits  and  general  usage,  are  within  the  discre¬ 
tion  of  the  state  legislature  or  the  people  of  the  state  in  framing 
their  constitution.  But  clear  and  hostile  discriminations  against 
particular  persons  and  classes,  especially  such  as  are  of  an  un¬ 
usual  character,  unknown  to  the  practice  of  our  governments, 
might  be  obnoxious  to  the  constitutional  prohibition.  .  .  .  We 
think  we  are  safe  in  saying  that  the  fourteenth  amendment 
was  not  intended  to  compel  the  state  to  adopt  an  iron  rule  of 
equal  taxation.” 

The  difficulty  in  justifying  such  a  system  of  state 
insurance  based  in  any  way  on  taxation  would  arise 
when  we  come  to  consider  the  payment  of  the  insur¬ 
ance  to  the  person  entitled  by  the  act  of  the  legislature 
thereto.  For  it  might  be  objected  that  the  power  of 
taxation  was  being  used  for  a  private  purpose.  What 
has  been  already  said  with  regard  to  the  constitu¬ 
tionality  of  schemes  of  voluntary  state  insurance  is 
of  force  here. 

A  recent  decision  of  the  Supreme  Court  of  the  United 
States  takes  a  long  step,  however,  in  the  direction  of 
recognizing  the  constitutionality  under  the  police 
power  of  the  states  of  schemes  of  compulsory  insurance, 
even  where  the  premium  is  paid  by  the  person  in¬ 
sured.  This  is  the  case  of  Noble  State  Bank  v.  Has- 


240  SOCIAL  REFORM  AND  THE  CONSTITUTION 

kell,1  which  upheld  a  state  law  providing  for  a  bank 
depositors  guaranty  fund.  The  fund  was  made  up  of 
assessments  on  the  banks.  The  court  said  in  uphold¬ 
ing  the  act : — 

“In  the  first  place  it  is  established  by  a  series  of  cases  that 
an  ulterior  public  advantage  may  justify  a  comparatively  insig¬ 
nificant  taking  of  private  property  for  what  in  its  immediate 
purpose  is  a  private  use.  .  .  .  And  in  the  next,  it  would  seem 
that  there  may  be  other  cases  besides  the  everyday  one  of  taxa¬ 
tion,  in  which  the  share  of  each  party  in  the  benefit  of  a  scheme 
of  mutual  protection  is  sufficient  compensation  for  the  correla¬ 
tive  burden  that  it  is  compelled  to  assume.  ...  It  may  be  said 
in  a  general  way  that  the  police  power  extends  to  all  the  great 
public  needs.2  It  may  be  put  forth  in  aid  of  what  is  sanctioned 
by  usage  as  held  by  the  prevailing  morality  or  strong  and  pre¬ 
ponderant  opinion  to  be  greatly  and  immediately  necessary  to 
the  public  welfare.” 

?  Another  method  in  which  the  sphere  of  activity  of 
the  state  has  been  increased  of  recent  years  is  to  be 
found  in  the  establishment  of  state  bureaus  of  em¬ 
ployment.  In  some  instances,  these  bureaus  have 
been  carried  on  in  the  same  manner  as  private  em¬ 
ployment  bureaus,  i.e.  a  fee  has  been  demanded  of 
persons  either  seeking  employment,  or  of  employers. 
In  such  a  case  such  bureaus  may  perhaps  be  regarded 
as  instances  of  government  ownership.  In  other 
instances,  the  services  of  these  government  bureaus 
have  been  offered  without  payment  to  employer  or 
employee.  In  such  a  case  such  bureaus  might  more 
properly  be  regarded  as  instances  of  government  aid. 
But  whatever  may  be  the  character  of  such  govern¬ 
ment  employment  agencies,  it  is  difficult  to  see  on 
what  ground  their  constitutionality  could  be  ques- 

1  31  S.  C.  R.  186.  2  Camfield  v.  United  States,  107  U.  S.  518. 


CONSTITUTIONALITY  OF  POLITICAL  REFORM  241 


tioned.  For  even  where  the  services  which  they  render 
are  given  without  payment,  they  might  well  be  re¬ 
garded  as  a  part  of  the  general  charitable  administra¬ 
tion  in  that  their  purpose  and  effect  are  to  diminish 
unemployment,  which  is  one  of  the  most  fruitful  causes 
of  pauperism.  It  is  probably  on  this  account  that, 
although  such  bureaus  exist  in  a  number  of  states,  no 
question  of  their  constitutionality  has  been  raised  in 
the  courts,  which  in  all  probability  would  regard  any 
appropriation  of  public  money  made  for  carrying  them 
on  as  an  expenditure  of  money  for  a  public  purpose.1 

It  may  therefore  be  said  that  our  constitutions  offer 
few,  if  any,  obstacles  to  a  very  substantial  increase  of 
the  functions  of  government,  either  state  or  national. 
Notwithstanding  our  constitutions,  we  have  the  power 
to  make  great  changes  in  both  the  character  and  the 
amount  of  work  we  devolve  upon  it.  The  questions 
arising  in  connection  with  these  subjects  are  thus 
questions  of  political  and  economic  expediency  rather 
than  of  constitutional  power. 

1  Sometimes  the  attempt  has  been  made  in  this  country  to  pro¬ 
vide  for  the  public  licensing  of  private  employment  agencies. 
The  requirement  of  such  licenses  has  been  held  to  be  constitutional 
by  the  Court  of  Appeals  of  the  state  of  New  York  (People  ex  rel. 
Armstrong  v.  Warden,  183  N.  Y.  223),  although  the  Supreme  Court 
of  the  state  of  Washington  has  held  unconstitutional  a  city  ordinance 
providing  for  licenses  in  such  cases  and  for  the  imposition  of  a  special 
criminal  penalty  on  the  licensees  for  making  false  representations  to 
those  seeking  employment.  The  basis  of  the  decision  was  that  an 
ordinance  selecting  the  keepers  of  employment  agencies  for  punish¬ 
ment  in  these  cases,  while  exempting  from  punishment  other  persons 
guilty  of  misrepresentation,  was  a  denial  of  the  equal  protection  of  the 
laws  provided  for  by  the  fourteenth  amendment  to  the  constitution 
of  the  United  States.  (Spokane  v.  Wacha,  51  Wash.  3231.) 


CHAPTER  VI 


THE  CONSTITUTIONALITY  OF  GOVERNMENT 

REGULATION 

The  main  demands  of  social  reform,  so  far  as  they 
are  included  within  the  general  head  of  government 
regulation,  are  labor  regulations,  including  within  that 
term  the  regulation  of  the  law  determining  the  liability 
of  employers  to  employed ;  the  regulation  of  the  use 
of  land  and  of  buildings  in  cities;  the  regulation  of 
“ property  affected  with  a  public  interest,”  as  it  is 
called;  the  use  of  the  power  of  taxation  for  social 
ends;  and  the  regulation  of  monopoly,  either  in  pro¬ 
cesses  of  production  or  distribution. 

I.  Labor  Regulations 

Labor  regulations  may  be  classified  under  four 
heads:  first,  those  which  attempt  to  secure,  as,  e.g., 
through  the  adoption  of  safety  appliances,  healthful 
and  safe  conditions  in  which  labor  is  to  be  carried  on ; 
second,  those  limiting  the  hours  of  labor;  third, 
those  changing  the  liability  of  employer  to  employee; 
and  fourth,  those  regulating  either  the  amount  of 
wages,  or  the  manner  in  which  they  may  be  paid. 

Regulations  attempting  to  secure  safe  and  health¬ 
ful  conditions  for  the  laboring  classes  have  uniformly 
been  upheld  by  the  Supreme  Court,  even  where  their 
enforcement  has  necessitated  the  expenditure  of  con- 

242 


» 


GOVERNMENT  REGULATION 


243 


siderable  sums  of  money  by  employers.  Such  would 
seem  to  be  the  law  as  expressed  in  Holden  v.  Hardy,1 
decided  in  1897,  where  a  series  of  state  statutes  reg¬ 
ulating  the  business  of  mining  are  referred  to  with 
approval.  In  its  opinion  in  this  case  the  court  says :  — 

“  While  the  business  of  mining  coal  and  manufacturing  iron 
began  in  Pennsylvania  as  early  as  1716,  and  in  Virginia,  North 
Carolina,  and  Massachusetts  even  earlier  than  this,  both  mining 
and  manufacturing  were  carried  on  in  such  a  limited  way,  and 
by  such  primitive  methods,  that  no  special  laws  were  considered 
necessary  prior  to  the  adoption  of  the  constitution  for  the  pro¬ 
tection  of  operators;  but  in  the  vast  proportions  which  these 
industries  have  since  assumed,  it  has  been  found  that  they  can 
no  longer  be  carried  on  with  due  regard  to  the  safety  and  health 
of  those  engaged  in  them,  without  special  provision  against  the 
dangers  necessarily  incident  to  these  employments.  In  conse¬ 
quence  of  this,  laws  have  been  enacted  in  most  of  the  states 
designed  to  meet  those  exigencies  and  to  secure  the  safety  of  per¬ 
sons  peculiarly  exposed  to  these  dangers.  Within  this  general 
category  are  ordinances  providing  for  fire  escapes  for  hotels, 
theaters,  factories,  and  other  large  buildings,  a  municipal  inspec¬ 
tion  of  boilers  and  appliances  designed  to  secure  passengers  upon 
railways  and  steamboats  against  the  dangers  necessarily  incident 
to  these  methods  of  transportation.  In  states  where  manufac¬ 
turing  is  carried  on  to  a  large  extent,  provision  is  made  for  the 
protection  of  dangerous  machinery  against  accidental  contact, 
for  the  cleanliness  and  ventilation  of  working  rooms,  for  the 
guarding  of  well  holes,  stairways,  elevator  shafts,  and  for  the 
employment  of  sanitary  appliances.  In  others,  where  mining 
is  the  principal  industry,  special  provision  is  made  for  shoring  up 
of  dangerous  walls,  for  ventilation  shafts,  bore  holes,  escapement 
shafts,  means  of  signaling  the  surface  for  the  supply  of  fresh 
air,  and  the  elimination,  as  far  as  possible,  of  dangerous  gases,  for 
safe  means  of  hoisting  and  lowering  cages,  for  limitation  upon  the 
number  of  persons  permitted  to  enter  a  cage,  that  cages  shall  be 
covered,  and  that  there  shall  be  fences  and  gates  around  the 


1 169  U.  S.  366. 


244  SOCIAL  REFORM  AND  THE  CONSTITUTION 


top  of  the  shaft,  besides  other  similar  precautions.”  After  giving 
a  list  of  such  acts  the  court  says :  “  These  statutes  have  been  re¬ 
peatedly  enforced  by  the  courts  of  several  states,  their  validity 
assumed,  and,  so  far  as  we  are  informed,  they  have  been  uni¬ 
formly  held  to  be  constitutional.” 

In  the  cases  arising  under  the  Safety  Appliances  Acts 
of  Congress,  the  constitutionality  of  such  legislation 
has  also  been  assumed.1 

In  a  number  of  instances,  however,  the  state  courts 
have  declared  unconstitutional  laws  whose  purpose 
was  apparently  to  protect  the  public  health,  because 
they  believed  the  laws  were  too  broad  in  their  applica¬ 
tion  and  imposed  unreasonable  limitations  on  the  use  of 
property,  or  because  they  were  so  framed  as  to  affect 
too  narrow  a  class  of  persons,  and  therefore  were  be¬ 
lieved  to  deny  the  equal  protection  of  the  laws.  Thus 
in  New  York  a  law  prohibiting  the  manufacture  of 
cigars  in  specified  classes  of  tenement  houses  in  cities 
having  more  than  a  certain  population  was  declared 
unconstitutional.2  Thus  again,  in  Illinois  an  act  was 
declared  unconstitutional  which  “  required  mine 
owners  to  provide  washrooms  at  the  top  of  each  coal 
mine  for  the  use  of  their  employees,  on  the  ground 
that  this  was  an  improper  discrimination  in  favor  of 
miners.”  3  As  in  the  New  York  case,  the  court  seemed 

1  See  supra ,  p.  59. 

2  In  re  Jacobs,  98  N.  Y.  98.  In  this  case  the  court  apparently 
did  not  think  that  it  could  take  into  consideration  the  peculiar  con¬ 
ditions  existing  in  the  cities  of  New  York  and  Brooklyn,  which  were 
the  only  cities  affected  by  the  act,  although  in  other  cases  it  has 
regarded  the  exemption  of  particular  localities  from  the  operation 
of  statutes  as  a  matter  entirely  within  the  discretion  of  the  legisla¬ 
ture.  See  e.g.  People  v.  Havnor,  149  N.  Y.  195. 

3  Dodd,  “The  Growth  of  Judicial  Power,”  Pol.  Set.  Quar.,  Vol. 
XXIV,  p.  195,  citing  Starne  v.  People,  222  Ill.  189. 


GOVERNMENT  REGULATION 


245 


to  be  unwilling  to  consider  the  peculiar  conditions 
present  in  the  case,  —  in  this  instance  bituminous  coal 
mining,  —  and  placed  its  decision  partly,  at  any  rate, 
upon  the  ground  that  “  the  legislature  cannot  ameliorate 
the  coal  miners’  condition  under  the  guise  of  the  police 
power  and  leave  others  unaided  who  suffer  from  like 
causes.” 

In  the  second  place,  we  find  statutes  which  also, 
with  the  alleged  purpose  of  protecting  the  health  or 
safety  of  workmen,  limit  the  number  of  hours  during 
which  employment  is  permitted.  The  statement  of 
the  law  on  this  subject,  as  developed  by  the  Supreme 
Court  of  the  United  States,  is  a  subject  of  some  diffi¬ 
culty.  We  have  three  important  cases,  which,  in  the 
order  of  the  time  of  their  decision,  are  Holden  v. 
Hardy,1  Lochner  v.  New  York,2  and  Muller  v. 
Oregon.3 

The  last  of  these  cases  held  constitutional  a  state 
law  limiting  the  hours  of  labor  for  women  in  factories, 
laundries,  etc.,  to  ten  hours  per  day,  and  sixty  hours 
per  week.  The  court  was  influenced  in  its  decision 
by  the  peculiar  physical  constitution  of  women,  and 
while  this  decision  may  stand  as  well  for  the  proposi¬ 
tion  that  a  reasonable  limitation  of  the  hours  of  labor 
of  children,  as  well  as  of  women,  is  constitutional,  since 
the  sanitary  reasons  for  the  law  are  very  apparent, 
it  cannot  be  regarded  as,  in  any  way,  outlining  the 
position  of  the  court  as  to  similar  laws  limiting  the 
hours  of  labor  of  adult  men. 

The  position  of  the  court  as  to  adult  men  must  be 
derived  from  a  consideration  of  the  other  two  cases. 
In  the  first  of  these  cases,  the  question  involved  was 

1  169  U.  S.  366.  2  198  U.  S.  45.  3  208  U.  S.  212. 


246  SOCIAL  REFORM  AND  THE  CONSTITUTION 


the  constitutionality  of  a  state  law  limiting  the  hours 
of  labor  to  eight  per  day  of  all  laborers,  even  adult 
men,  in  underground  mines,  or  in  smelters,  or  other 
institutions  for  the  reduction  or  refining  of  ores  or 
metals,  excepting  cases  of  emergency  where  life  or 
property  is  in  imminent  danger.  The  court  upheld 
the  law,  Mr.  Justice  Brewer  and  Mr.  Justice  Peckham 
dissenting,  on  the  theory  that  the  employments  af¬ 
fected  by  the  law  — 

“when  too  long  pursued,  the  legislature  has  judged  to  be  det¬ 
rimental  to  the  health  of  the  employees,  and  so  long  as  there  are 
reasonable  grounds  for  believing  that  this  is  so,  its  decisions  upon 
the  subject  cannot  be  reviewed  by  the  federal  courts.”  The 
court  adds  that  “while  the  general  experience  of  mankind  may 
justify  us  in  believing  that  men  may  engage  in  ordinary  employ¬ 
ments  more  than  eight  hours  per  day  without  injury  to  their 
health,  it  does  not  follow  that  labor  for  the  same  length  of  time 
is  innocuous  when  carried  on  beneath  the  surface  of  the  earth, 
where  the  operative  is  deprived  of  fresh  air  and  sunlight,  and  is 
frequently  subjected  to  foul  atmosphere  and  a  very  high  tem¬ 
perature,  or  to  the  influence  of  noxious  gases,  generated  by  the 
processes  of  refining  or  smelting.” 1 

In  the  case  of  Lochner  v.  New  York,  the  question 
before  the  court  was  the  constitutionality  of  a  law 
limiting  to  ten  a  day  the  hours  of  labor  permitted  in 
a  bakery.  In  an  opinion  given  by  Mr.  Justice  Peck- 
ham,  with  four  justices  dissenting,  the  court  held  the 
act  unconstitutional  on  the  theory  that  “the  trade 
of  a  baker,  in  and  of  itself,  is  not  an  unhealthy  one  to 
the  degree  which  would  authorize  the  legislature  to 
interfere  with  the  right  to  labor,  with  the  right  of  free 

1  See  also  Soon  Hing  v.  Crowley,  113  U.  S.  703,  which  upheld  a 
law  forbidding  one  employed  in  a  laundry  to  wash  or  iron  between 
10  p.m.  and  6  a.m. 


GOVERNMENT  REGULATION 


247 


contract  on  the  part  of  the  individual,  either  as  em¬ 
ployer  or  as  employee.” 

A  comparison  of  these  two  decisions  would  lead  to 
the  conclusion  reached  by  Professor  Henry  R.  Seager  1 
that  “the  question  of  the  constitutionality  of  a  re¬ 
strictive  labor  law  is  inseparably  connected  with  the 
question  of  the  wisdom  of  such  a  law.”  What  this 
means  is,  that  the  court  must  be  convinced  of  this 
wisdom.  What  the  courts  actually  do  in  cases  in 
which  they  declare  a  law  of  this  sort  unconstitutional, 
is  to  substitute  their  ideas  of  wisdom  for  those  of  the 
legislature,  although  they  continually  say  that  this  is 
not  the  case.2 

There  have  been  few  attempts  made  in  this  country 
similar  to  those  made  in  Australia  to  do  away  with 
“ sweating,”  as  it  is  called,  either  by  providing  for 
the  placing  of  labels  upon  all  goods  manufactured, 
e.g.j  in  tenement  houses,  or,  by  prohibiting  work  therein, 
or  the  subletting  of  contracts  in  trades  like  the 
garment  trades  where  sweating  is  particularly  liable 
to  occur.  We  have  not  as  yet  had  any  decisions  on 
any  of  these  questions  in  the  United  States  Supreme 
Court  because  of  the  fact  that,  in  the  cases  mentioned, 
state  laws  of  this  character  have  usually  been  declared 
unconstitutional,  or  because  the  matter  would  appear 
to  be  within  the  prohibition  of  a  decision  of  the 
Supreme  Court  made  with  regard  to  some  other  matter. 

1  “  The  Attitude  of  American  Courts  towards  Restrictive  Labor 
Legislation,”  Pol.  Set.  Quar.,  Vol.  XIX,  p.  589. 

2  Since  the  above  was  written  the  Supreme  Court  in  the  case  of 
Baltimore  and  Ohio  Railroad  Co.  v.  Interstate  Commerce  Com¬ 
mission  has  upheld  the  constitutionality  of  an  act  of  Congress  limit¬ 
ing  the  hours  of  labor  of  persons  employed  in  the  operation  of  rail¬ 
ways  engaged  in  interstate  commerce. 


248  SOCIAL  REFORM  AND  THE  CONSTITUTION 


Thus,  the  New  York  Court  of  Appeals  has  held  that 
it  is  unconstitutional  for  the  legislature  to  provide 
that,  in  certain  cities  of  the  state  where  in  the  opinion 
of  the  legislature  conditions  seemed  to  demand  it, 
articles  shall  not  be  made  in  the  homes  of  the  inhabit¬ 
ants  of  those  cities.  This  decision  was  made  in  the 
case  of  a  law  prohibiting  the  manufacture  of  cigars 
in  certain  kinds  of  tenement  houses  in  the  cities  of 
New  York  and  Brooklyn.  It  is  possible  that  the 
decision  is  based  upon  a  denial  of  the  equal  protection 
of  the  laws  rather  than  upon  any  deprivation  of  liberty, 
but  it  is  altogether  probable  that  it  would  be  regarded 
as  a  precedent  in  favor  of  the  proposition  that  the 
legislature  may  not,  where  considerations  of  health 
are  not  clearly  at  issue,  prohibit  work  of  any  sort  in 
the  homes  of  the  people.1 

The  Court  of  Appeals  of  the  state  of  New  York 
has  also  held  that  a  law  is  unconstitutional  which 
provides  under  a  criminal  penalty  that  articles  made 
in  state  prisons  and  offered  for  sale  shall  be  labeled 
“  convict  made.” 2  The  decision  was  reached  by 
a  bare  majority,  three  of  the  judges  who  concurred 
with  the  writer  of  the  majority  opinion,  Judge  O’Brien, 
concurring  upon  the  ground  that  the  statute  con¬ 
flicted  with  the  commerce  clause  of  the  federal  con¬ 
stitution,  as  the  articles  for  selling  which  the  de¬ 
fendant  was  prosecuted  had  been  made  in  a  state 
prison  in  Ohio.  The  case  therefore  stands  for  the 
proposition  that  a  state  may  not  impose,  upon  per¬ 
sons  offering  goods  made  in  a  state  prison  of  another 
state,  the  obligation  to  affix  to  such  articles  the  label 

1  In  re  Jacobs,  98  N.  Y.  98. 

2  People  v.  Hawkins,  157  N.  Y.  i„ 


GOVERNMENT  REGULATION 


249 


“convict  made.”  Judge  O’Brien,  however,  placed  his 
decision  on  another  ground,  viz.  that  it  was  a  taking 
of  property  without  due  process  of  law  to  impose  upon 
a  person  offering  articles  for  sale  the  obligation  to 
attach  to  them  a  label  which  would  detract  from  their 
value.  He  says:  — 

“  The  question  is  reduced  to  the  simple  inquiry  whether  the 
legislature  under  the  guise  of  the  police  power  can  regulate  the 
price  of  labor  by  depressing,  through  the  penalties  of  the  crimi¬ 
nal  law,  the  price  of  goods  in  the  market  made  by  one  class  of 
workmen  and  correspondingly  enhancing  the  goods  made  by  an¬ 
other  class.  If  the  statute  does  not  tend  to  produce  that  result, 
there  is  no  reason  or  excuse  for  its  existence,  and  it  would  be  a 
useless  and  arbitrary  interference  with  the  liberty  of  the  individ¬ 
ual  without  any  possible  reason  or  motive  behind  it.  The  law 
is  now  defended  upon  the  ground  that  it  was  intended  to  accom¬ 
plish,  and  in  fact  does  tend  to  promote,  that  very  result.  If  the 
police  power  extends  to  the  protection  of  certain  workmen  in 
their  wages  against  the  competition  of  other  workmen  in  penal 
institutions,  why  not  extend  it  to  other  forms  of  competition  ? 
Why  not  give  to  the  women,  the  weaker  sex,  who  are  often  the 
victims  of  improvidence  and  want,  a  preference  by  statute 
over  the  men?  Why  confine  such  legislation  to  scrubbing 
brushes  and  like  articles  made  in  prisons,  when  multitudes 
of  men  engaged  in  farming,  mercantile  pursuits,  and  almost 
every  vocation  in  life  are  struggling  against  competition?  If 
the  statute  now  under  consideration  is  a  valid  exercise  of  the 
police  power,  I  am  unable  to  give  any  reason  why  the  legislature 
may  not  interfere  in  all  the  cases  I  have  mentioned  to  help  those 
who  need  help  at  the  expense  of  those  who  do  not.” 

If  this  is  the  law,  and  none  of  the  minority  expressed 
any  dissent  from  this  portion  of  the  majority  opinion, 
any  attempt  to  provide  for  the  labeling  so  as  to  show 
their  origin,  of  garments  made,  e.  g.,  in  tenement  houses, 
except  in  so  far  as  such  a  provision  might  be  used  for 
the  protection  of  the  public  health,  would  be  un- 


250  SOCIAL  REFORM  AND  THE  CONSTITUTION 


constitutional.  The  mere  prevention  of  “sweated” 
labor  may  not  constitutionally  be  secured  through 
statute. 

Finally,  the  Supreme  Court  of  the  United  States  has 
held  in  Allgeyer  v.  Louisiana  1  and  Lochner  v.  New 
York,2  that  the  liberty  of  which  one  may  not  be 
deprived  without  due  process  of  law  includes  the  liberty 
to  contract  except  where  that  liberty  has  been  limited 
through  the  exercise  of  the  police  power  in  the  interest 
of  the  public  health  and  safety,  and  in  that  of  protect¬ 
ing  the  weaker  members  of  society,  such  as  coal 
miners  in  their  dealings  with  their  employers.5  If, 
therefore,  the  subletting  of  garment-making  contracts 
cannot  be  shown  to  have  an  appreciable  effect  upon 
the  public  health  or  to  be  in  the  interest  of  a  class  of 
employees  in  a  position  of'  economic  disadvantage 
over  against  their  employers,  it  is  difficult  to  see  how 
laws  prohibiting  the  subletting  of  such  contracts  could 
be  regarded  as  a  constitutional  exercise  of  the  police 
power.  While  it  would  probably  be  impossible  to 
show  that  the  carrying  home  of  work  was  in  and  of 
itself  and  in  all  cases  prejudicial  to  the  public  health, 
it  would  perhaps  be  possible  to  prove  to  a  court  that 
in  conditions  such  as  exist,  e.g .,  in  the  tenement  house 
district  in  New  York  City,  the  doing  of  work  on  gar¬ 
ments  in  the  home,  combined  with  the  subletting  of 
garment  work  contracts,  did  put  those  who  actually 
did  the  work  on  such  garments  at  such  an  economic- 
disadvantage  as  to  bring  them  within  the  rule  laid 
down  by  the  Supreme  Court.4 

1 165  U.  S.  578.  2 198  U.  S.  45. 

8  See  Knoxville  Iron  Co.  v.  Harbison,  183  U.  S.  13. 

4  Ibid. 


GOVERNMENT  REGULATION 


251 


The  third  class  of  statutes  which  have  been  passed 
in  the  attempt  to  regulate  labor  conditions  are  those 
which  change  the  existing  law  as  to  the  liability  of 
employers  to  employed.  The  Anglo-American  law 
as  to  this  liability  contains  three  rules  which  would 
seem  to  have  been  adopted  with  the  idea  of  protecting 
the  interests  of  the  employer  rather  than  those  of  the 
employed.  They  were  furthermore  adopted  at  a  time 
when  the  political  influence  of  the  employed  was  not 
as  great  as  that  of  the  employer,  and  when  it  was 
considered  expedient,  if  not  necessary,  to  encourage 
where  possible  the  investment  of  capital  in  industrial 
enterprises.  They  are,  first,  that  an  employer  is  not 
liable  to  an  employee  for  the  damage  caused  by  a  co¬ 
servant;  second,  that  the  contributory  negligence 
of  an  employee  shall  be  an  absolute  bar  to  the  recovery 
from  an  employer  of  damages  in  cases  in  which  the 
employee,  as  well  as  the  employer,  has  been  guilty  of 
negligence;  and,  finally,  that  where  an  employee  has 
knowledge  of  unsafe  conditions,  and  notwithstanding 
that  knowledge  continues  his  work,  he  is  to  be  deemed 
to  have  assumed  the  risk  of  those  conditions.  There 
would  seem  to  be  no  constitutional  objection  to  the 
change  of  any  of  these  rules  by  statute,1  and  to  for¬ 
bidding  the  employer  to  evade  the  liability  by  con¬ 
tracting  to  that  effect  with  his  employees.2 


1  Tullis  v.  Lake  Erie  &  Ry.  Co.,  175  U.  S.  348;  El  Paso  N.  E.  Ry. 
Co.  v.  Guitierez,  215  U.  S.  87;  Hyde  v.  Southern  Ry.  Co.,  31  App. 
D.  C.  466 ;  Johnson  v.  Southern  Pacific  Ry.  Co.,  196  U.  S.  1 ;  Schlem- 
mer  v.  Buffalo,  Rochester  &  Pittsburg  Ry.  Co.,  205  U.  S.  1 ;  Em¬ 
ployers’  Liability  cases,  207  U.  S.  463,  particularly  remarks  by  Mr. 
Justice  White,  supra.  In  some  of  the  state  courts  such  laws  have, 
however,  been  held  to  be  unconstitutional. 

*  Atlantic  Coast  Line  v.  Riverside  Mills,  31  S.  C.  Rep.  164. 


252  SOCIAL  REFORM  AND  THE  CONSTITUTION 

It  may  therefore  safely  be  said  that,  as  the  law 
now  stands,  there  is  no  constitutional  objection 
based  upon  the  constitution  of  the  United  States, 
to  statutes  which  modify  the  rules  of  the  private 
law  as  to  the  employers’  liability  for  the  acts  of 
a  coservant,  the  contributory  negligence  of  the 
employee,  and  the  assumption  of  risk  by  the 
employee. 

Several  progressive  nations,  such  as  Great  Britain, 
Belgium,  and  New  Zealand,  have  in  large  measure 
abandoned  the  idea  of  employers’  liability,  and  have 
adopted  that  of  workingmen’s  compensation.  As  this 
latter  method  of  compensating  workingmen  for  dam¬ 
ages  resulting  from  accidents  is  based  upon  the  theory 
that  the  liability  of  the  employer  is  independent  of 
any  negligence  on  his  part,  and  exists  even  where  the 
only  negligence  is  that  of  the  employee  to  whom  the 
compensation  is  awarded,  the  question  has  arisen 
whether  a  law  making  provision  for  it  would  not  be 
regarded  as  depriving  the  employer  of  his  property 
without  due  process  of  law.  While  the  question  has 
not  as  yet  been  decided  by  the  Supreme  Court  in  the 
United  States,  those  who  have  studied  it  would  seem 
to  be  of  the  opinion  that  the  compensation  idea  is 
applicable  in  the  United  States  only  to  inherently 
dangerous  occupations.  In  such  occupations  it  is 
perhaps  justified  on  the  theory  under  which  the  law 
makes  the  owner  of  an  inherently  dangerous  animal 
or  one  who  follows  a  dangerous  pursuit,  e.g.  the  manu¬ 
facture  of  explosives,  absolutely  responsible  for  the 
damages  such  animal  or  occupation  has  caused, 
regardless  of  the  freedom  from  negligence  of  the  de¬ 
fendant  in  the  suit.  The  New  York  Court  of  Appeals 


GOVERNMENT  REGULATION 


253 

has  recently  declared  such  a  law  to  be  unconstitu¬ 
tional.1 

Finally,  in  a  few  instances  the  attempt  has  been 
made,  as,  e.g .,  in  New  Zealand,  to  regulate  by  means 
of  compulsory  arbitration  of  labor  disputes  the  wages 
to  be  paid  to  workingmen.  There  are  no  decisions 
directly  in  point  upon  the  constitutionality  of  such 
legislation  in  the  United  States.  But  while  legislation 
providing  for  voluntary  arbitration  or  conciliation  by 
public  officers  would  seem  to  be  proper,2  it  is  diffi¬ 
cult  to  see  how  compulsory  arbitration  could  be 
justified  under  the  powers  of  legislation  possessed 
by  either  Congress  or  the  state  legislatures.  For, 
because  of  either  the  thirteenth,  fifth,  or  fourteenth 
amendments  to  the  United  States  constitution,  most 
laws,  whether  of  Congress  or  of  the  state  legislatures, 
are  regarded  as  unconstitutional,  which  attempt 
either  to  force  under  criminal  penalties  individuals 
to  carry  out  a  labor  contract,  or  to  control  the  freedom 
of  action  of  private  employers  by  forbidding  them  in 
their  employment  or  discharge  of  employees  from 
discriminating  against  a  man  because  he  is  or  is  not 
a  member  of  a  union.  The  constitutionality  of  all 
legislation  giving  a  preference  to  union  labor  is  ex¬ 
pressly  denied  in  Adair  v.  United  States,3  while  state¬ 
ments  made  in  the  opinion,  as  well  as  in  opinions  in 
other  cases,  would  seem  to  hold  that  most  attempts 
to  compel  men  to  work,  or  employers  to  employ  them, 
on  stated  conditions  are  improper.  In  this  case  the 
defendant  Adair  was  indicted  for  having,  contrary 

1  See  Ives  v.  South  Buffalo  Ry.  Co.,  201  N.  Y.  271. 

2  See  Mr.  Justice  Moody’s  dissenting  opinion  in  Employers’ 

Liability  cases,  supra ,  p.  57.  3  208  U.  S.  161. 


254  SOCIAL  REFORM  AND  THE  CONSTITUTION 


to  an  act  of  Congress,  dismissed  from  the  service  of 
the  railroad  company  of  which  he  was  manager  one 
Coppage  because  of  his  membership  in  a  labor  organi¬ 
zation.  The  fact  of  dismissal  for  the  reason  alleged 
was  admitted.  Mr.  Justice  Harlan,  in  writing  the 
majority  opinion  of  the  court,  Mr.  Justice  McKenna 
and  Mr.  Justice  Holmes  dissenting,  held  the  act  of 
Congress  unconstitutional  under  the  fifth  amendment, 
which  provides  that  “no  person  shall  ...  be  de¬ 
prived  of  his  life,  liberty,  or  property  without  due 
process  of  law.”  He  said:  — 

“The  right  of  a  person  to  sell  his  labor  upon  such  terms  as 
he  deems  proper,  is  in  its  essence  the  same  as  the  right  of  the 
purchaser  of  labor  to  prescribe  the  conditions  upon  which  he 
will  accept  such  labor  from  the  person  offering  to  sell  it.  So  the 
right  of  the  employee  to  quit  the  service  of  the  employer,  for  what¬ 
ever  reason,  is  the  same  as  the  right  of  the  employer  for  whatever 
reason  to  dispense  with  the  services  of  such  employee.  It  was 
the  legal  right  of  the  defendant  Adair  —  however  unwise  such  a 
course  might  have  been  —  to  discharge  Coppage  because  of  his 
being  a  member  of  a  labor  organization,  as  it  was  the  legal  right 
of  Coppage,  if  he  saw  fit  to  do  so,  —  however  unwise  such  a  course 
on  his  part  might  have  been,  —  to  quit  the  service  in  which  he 
was  engaged,  because  the  defendant  employed  some  persons  who 
were  not  members  of  a  labor  organization.  In  all  such  particu¬ 
lars  the  employer  and  the  employee  have  equality  of  right,  and 
any  legislation  that  disturbs  that  equality  is  an  arbitrary  inter¬ 
ference  with  the  liberty  of  contract  which  no  government  can 
justify  in  a  free  land.” 

This  rather  broad  statement  of  the  position  of 
employer  and  employed  is  somewhat  modified  by 
the  almost  immediately  succeeding  sentence.  Mr. 
Justice  Harlan  adds  :  — 

“Of  course,  if  the  parties  by  contract  fix  the  period  of  serv¬ 
ice,  and  prescribe  the  conditions  upon  which  the  contract  may 


GOVERNMENT  REGULATION 


255 


be  terminated,  such  contract  would  control  the  rights  of  the 
parties  as  between  themselves,  and  for  any  violation  of  those 
provisions  the  party  wronged  would  have  his  appropriate  civil 
action.  And  it  may  be  —  but  upon  that  point  we  express  no 
opinion  —  that  in  case  of  a  labor  contract  between  an  employer 
engaged  in  interstate  commerce  and  his  employee,  Congress 
could  make  it  a  crime  for  either  party  without  sufficient  or  just 
excuse  or  notice  to  disregard  the  terms  of  such  contract  or  re¬ 
fuse  to  perform  it.” 

Some  such  result  would  seem  to  have  been  accom¬ 
plished  by  the  Anti-Trust  Act  of  1890,  which  makes 
illegal  any  contract,  combination,  or  agreement  in  re¬ 
straint  of  interstate  and  foreign  commerce.  This  act 
did  not  punish  criminally  combinations  in  the  nature  of 
strikes,  but  in  both  the  Debs  case  1  and  in  the  Dan¬ 
bury  Hatters  case  2  the  court  recognized  a  power  in 
the  United  States  government  to  protect  through 
its  courts  the  freedom  of  interstate  commerce.  In 
the  Debs  case  the  court  says  that  the  “scope  and 
purpose  of  the  bill”  of  injunction,  the  issue  of  which 
was  sustained,  “was  only  to  restrain  forcible  obstruc¬ 
tions  of  the  highways  along  which  interstate  commerce 
travels  and  the  mails  are  carried,”  but  in  the  Dan¬ 
bury  Hatters  case  the  acts  complained  of  apparently 
did  not  consist  of  force,  but  were  confined  to  a  peaceful 
strike  accompanied  by  a  boycott.  Mr.  Chief  Jus¬ 
tice  Fuller,  who  delivered  the  opinion  of  the  court,  said 
expressly  that  the  decisions  of  the  court  “hold  in 
effect  that  the  Anti-Trust  Law  has  a  broader  applica¬ 
tion  than  the  prohibition  of  restraints  of  trade  unlaw¬ 
ful  at  common  law.” 

But  while  Congress  has  thus  probably  wide  power 

1  In  re  Debs,  158  U.  S.  564. 

2  Loeve  v.  Lawlor,  208  U.  S.  274. 


256  SOCIAL  REFORM  AND  THE  CONSTITUTION 


of  regulating  the  actions  of  employers  and  employed 
engaged  in  interstate  commerce,  never  with  one  excep¬ 
tion  have  the  United  States  courts  gone  so  far  as  to 
hold  that  employees  may  be  actually  forced  to  keep 
at  work  or  employers  be  forced  to  retain  them.  In¬ 
deed,  Mr.  Justice  Harlan  when  on  circuit  once  said : 

“  It  would  be  an  invasion  of  one’s  natural  liberty  to  compel  him 
to  work  for  or  to  remain  in  the  personal  service  of  another. 
One  who  is  placed  in  such  a  restraint  is  in  a  condition  of  invol¬ 
untary  servitude  —  a  condition  which  the  supreme  law  of  the  land 
says  shall  not  exist  within  the  United  States,  or  in  any  place 
subject  to  their  jurisdiction.” 1 

The  same  principle  is  laid  down  in  the  recent  deci¬ 
sion  of  the  Supreme  Court  in  Bailey  v.  Alabama.2  In 
this  case,  an  act  of  a  state  legislature  was  held  to  be 
unconstitutional  as  providing  for  involuntary  servitude 
contrary  to  the  thirteenth  amendment  and  the  United 
States  peonage  law.  The  act  attempted  to  punish 
criminally  as  fraud  the  breach  without  just  cause  of  a 
contract  to  labor,  where  the  laborer  received  an  advance 
of  money  or  other  personal  property  with  intent  to 
defraud,  and  provided  that  the  breach  of  the  contract 
without  returning  the  advance  should  be  prima  facie 
evidence  of  the  intent  to  defraud.  The  act  was 
regarded  as  indirectly  providing  for  involuntary  ser¬ 
vitude,  since  “its  natural  and  inevitable  effect  is  to 
expose  to  conviction  for  crime  those  who  simply 
fail  or  refuse  to  perform  contracts  for  personal  serv¬ 
ice  in  liquidation  of  a  debt ;  and  judging  its  purpose 
by  its  effect,  it  seeks  in  this  way  to  provide  means  of 
compulsion  through  which  performance  of  such 
service  may  be  secured.” 

1  Arthur  v.  Oakes,  63  Fed.  310,  317.  2  31  S.  C.  Rep.  145. 

s 


GOVERNMENT  REGULATION 


257 


It  is,  however,  conceivable  that  the  court  would 
consider  as  proper  a  law  prohibiting  strikes  and  lock¬ 
outs  in  the  case  of  undertakings  like  railways  and 
other  public  service  corporations,  because  of  their  inti¬ 
mate  connection  with  the  public  interests.  It  has 
been  held  partly  for  this  reason,  although  it  must  be 
admitted  that  the  court  in  this  case  was  also  influenced 
by  historical  considerations,  that  a  seaman  maybe  pun¬ 
ished  criminally  for  breaking  his  contract.1 

Apart  possibly  from  the  case  of  public  service  enter¬ 
prises,  it  is  difficult  to  see  how,  in  the  face  of  these  deci¬ 
sions,  the  courts  can  be  expected  to  hold  constitu¬ 
tional  laws  providing  for  compulsory  arbitration  the 
fixing  of  wages  by  public  authority,  or  the  carrying 
out  of  a  labor  contract,  by  means  of  a  criminal  pen¬ 
alty  for  refusing  to  observe  the  law  arbitration  decision 
or  contract  without  which  such  laws  would  be  futile. 

No  attempt  has  been  made  in  this  country  to  fix  a 
minimum  wage  for  ordinary  employees,  as  has  been  done 
in  Australia,  and  there  is  little  doubt  that  any  law 
making  such  an  attempt  would  be  unconstitutional  as 
infringing  the  freedom  of  contract.  But  the  Supreme 
Court  of  the  United  States  has  recognized  a  right  in  the 
state  legislature  and  in  Congress,  respectively,  to  fix 
the  rates  of  pay  and  the  hours  of  labor  of  persons 
employed  on  public  works  or  the  works  of  the  mu¬ 
nicipal  corporations  within  the  limits  of  a  state.2  In 
a  number  of  states,  however,  laws  have  been  passed 
prohibiting  the  payment  of  wages  in  kind,  or  regu¬ 
lating  in  some  other  way  the  methods  of  paying  wages 

1  Robertson  v.  Baldwin,  165  U.  S.  275. 

2  Atkins  v.  Kansas,  191  U.  S.  207 ;  Ellis  v.  United  States,  206  U.  S. 
246. 


258  SOCIAL  REFORM  AND  THE  CONSTITUTION 


in  particular  industries.  There  has  been  consid¬ 
erable  conflict  in  the  state  courts  as  to  the  consti¬ 
tutionality  of  such  legislation,  but  the  Supreme 
Court  has  upheld  state  statutes  which  have  regu¬ 
lated  the  method  of  paying  employees  by  provid¬ 
ing  for  the  cashing  of  coal  orders  when  presented 
by  the  miners  to  their  employers,1  and  for  the  weighing 
of  coal  without  screening  where  miners  are  paid  by 
the  weight  of  coal.2 

II.  Regulation  of  the  Use  of  Property  in 

Urban  Districts 

The  congestion  of  population  within  urban  districts 
and  the  consequent  or  attendant  unsanitary  condi¬ 
tions  in  which  such  population  is  living  have  become  an 
object  of  solicitude  upon  the  part  of  the  governments 
of  the  most  progressive  peoples.  The  purpose  of  most 
of  the  regulations  which  have  been  adopted  has  been 
through  some  limitation  imposed  upon  the  un¬ 
controlled  or  intensive  use  of  land  either  to  remedy 
existing  evil  conditions  or  to  prevent  their  duplication 
in  those  portions  of  the  cities  where  building  opera¬ 
tions  have  not  as  yet  begun  on  a  large  scale. 

The  character  of  the  regulations  which  have  been 
adopted,  however,  has  depended  to  some  extent  upon 
the  state  of  the  private  law  as  to  real  property.  Thus 
in  England  the  private  law  doctrine  of  ancient  lights 
has  made  unnecessary  resort  to  very  drastic  measures 

1  Knoxville  Iron  Co.  v.  Harbison,  185  U.  S.  13.  This  is  an  interest¬ 
ing  case,  as  it  recognizes  that  the  police  power  of  the  states  may  be 
used  to  protect  those  classes  of  the  community  who  are  at  an  economic 
disadvantage  over  against  their  employers. 

2  McLean  v.  Arkansas,  21 1  U.  S.  539. 


GOVERNMENT  REGULATION 


259 


of  a  police  character.  Sufficient  air  and  light  for 
the  need  of  an  urban  population  are,  in  the  main, 
secured  through  reliance  on  individual  property 
owners  to  protect  the  rights  recognized  by  the  law 
as  theirs  against  encroachment  on  the  part  of  other 
owners.  In  the  United  States,  however,  where  the 
doctrine  of  ancient  lights  is  not  generally  recognized, 
almost  no  reliance  whatever  can  be  placed  on  the 
individual  action  of  property  owners  in  the  prevention 
of  a  too  intensive  use  of  land. 

There  would  seem,  however,  to  be  no  objection 
to  the  adoption  by  legislation  of  the  English  doctrine. 
This  would  seem  to  follow  by  analogy  from  the  deci¬ 
sions  in  matters  of  dower  rights  which  have  almost 
universally  adopted  the  view  that  such  rights,  as  incho¬ 
ate  and  not  vested  rights,  may  be  prospectively  cut  off 
by  legislation.  The  right  to  build  so  as  to  obstruct 
the  light  and  air  of  adjoining  property  may  also  per¬ 
haps  be  regarded  until  its  exercise  as  an  inchoate  right 
of  which  the  property  owner  may  be  deprived  with¬ 
out  compensation.  As,  however,  the  English  doctrine 
would  not  have  any  great  immediate  effect  on  the  prob¬ 
lem  of  congestion  unless  the  prescription  period  were 
made  quite  short,  the  question  arises  as  to  what  would 
probably  be  the  attitude  of  the  courts  if  such  action 
were  taken.  It  is,  of  course,  impossible  to  prophesy 
what  that  attitude  would  be.  It  may,  however,  be 
said  that  the  courts  ordinarily  accord  considerable 
liberty  to  the  legislature  in  the  fixing  of  prescription 
and  limitation  periods,1  and  there  would  seem  to 
be  no  reason  for  a  departure  from  this  rule  in  this 

1  See  Terry  v.  Anderson,  95  U.  S.  628,  and  remarks  of  Mr.  Justice 
Miller  in  Mitchell  v.  Clark,  no  U.  S.  633. 


260  social  reform  and  the  constitution 


case  unless  the  period  were  made  so  short  as  to  amount 
to  a  virtual  taking  of  property. 

In  the  absence  of  such  a  change  in  American  real 
estate  law  as  has  been  outlined,  the  intensive  use  of 
land  can  be  prevented  only  by  a  much  more  drastic 
government  regulation ;  and,  indeed,  whatever  may 
be  the  private  law  of  real  estate  in  this  respect,  it  may 
safely  be  said  that  all  successful  attempts  to  secure 
sanitary  conditions  for  urban  populations  are  based 
on  some  government  regulation,  of  either  the  area 
of  land  which  may  be  built  upon,  or  the  heights  to 
which  buildings  may  be  erected,  or  both. 

Further,  all  countries,  in  which  the  urban  problem 
has  assumed  importance,  have  made  attempts  to 
regulate  the  structural  character  of  the  buildings 
erected  in  cities,  and  in  many  cases  have  passed 
regulations  which  have  a  retroactive  effect.  In  so  far 
as  such  regulation  is  regarded  as  directly  furthering  the 
public  health  and  safety,  it  is  upheld  by  the  Supreme 
Court  as  a  justifiable  exercise  of  the  police  power  of 
the  state.  This  is  the  doctrine  of  Barbier  v.  Connolly  1 
and  Welch  v.  Swazey.2  Indeed,  the  decisions  of  the 
United  States  Supreme  Court  are  so  emphatic  as 
to  the  right  of  the  state,  notwithstanding  the  provisions 
of  the  fourteenth  amendment  to  regulate  the  use  of 
land  and  the  construction  of  buildings  in  cities  in 
the  interest  of  the  public  health  and  safety,  that 
almost  no  cases  are  carried  to  that  court  on  appeal 
from  the  decisions  of  the  state  courts,  although  those 
decisions  also  go  very  far  in  the  recognition  of  those 
powers  of  legislation  in  the  state  legislature.  A  good 
example  of  the  decisions  of  the  state  courts  may 
1 113  U.  S.  27.  2  214  U.  S.  91. 


GOVERNMENT  REGULATION 


261 


perhaps  be  found  in  Health  Department  of  the  City 
of  New  York  v.  Trinity  Church.1  In  this  case  it 
was  held  that  the  legislature  might  constitutionally 
provide  that  every  tenement  house  in  the  city  of 
New  York  should,  when  required  by  the  city  health 
department  be  provided  with  running  water  on  each 
floor,  and  that  the  fact  that  compliance  with  such 
an  order  involved  the  owner  of  the  house  in  expense, 
was  no  reason  for  treating  the  act  as  improper.2 

The  regulations  with  regard  to  the  construction 
of  buildings  in  the  interest  of  the  public  safety  have 
not,  however,  been  considered  as  sufficient  to  secure 
the  end  sought,  and  of  recent  years  attempts  have 
been  made  both  in  this  country  and  foreign  countries 
to  differentiate  residence  and  business  districts  by 
imposing  limitations  on  the  height  to  which  buildings 


1  145  N.  Y.  32. 

2  See  also  Tenement  House  Department  v.  Moeschen,  179  N.  Y. 
325,  where  it  was  held  that  the  legislature  might  provide  with  retro¬ 
active  effect  for  certain  structural  requirements  whose  observance 
necessitated  the  expenditure  of  quite  an  amount  of  money  by  house 
owners.  But  see  Bonnett  v.  Vallier,  136  Wis.  193,  in  which  it  was  held 
that  a  law  regulating  prospectively  the  construction  of  tenement 
and  lodging  houses  was  unconstitutional,  because  imposing  unreason¬ 
able  limitations  on  the  use  of  property.  In  this  case,  the  law  applied 
to  all  the  cities,  villages,  and  towns  of  the  state,  and  among  other 
things  required  that  the  buildings  affected  by  it  should  have  courts 
six  feet  in  width.  The  plans  of  a  building,  a  tenement  house,  which 
was  to  be  erected  in  the  city  of  Milwaukee,  provided  a  court  only 
three  feet  in  width,  and  an  injunction  suit  was  brought  to  prevent 
the  officers  intrusted  with  the  execution  of  the  law  from  interfering 
with  the  construction  of  the  building.  The  court  was  influenced  in 
its  determination  by  the  fact  that  the  law  applied  to  the  whole  state, 
required  plumbing  appliances  which,  on  account  of  the  absence  of 
water  and  sewers,  it  would  be  impossible  in  many  parts  of  the  state 
to  provide,  and  contained  drastic  criminal  penalties  for  violation  of 
its  provisions. 


262  SOCIAL  REFORM  AND  THE  CONSTITUTION 


may  be  built  which  differ  in  different  districts.  The 
objection  has  been  made  to  such  legislation  that  it 
denies  the  equal  protection  of  the  laws,  as  well  as 
deprives  the  owner  of  his  property  without  due  process 
of  law.  There  is  only  one  case  in  the  Supreme  Court 
of  the  United  States  which  is  directly  in  point.  This 
is,  Welch  v.  Swazey.1  In  this  case  the  legislature  of 
Massachusetts  provided  for  a  division  of  the  City  of 
Boston  into  two  districts.  In  one,  the  height  of  the 
buildings  was  limited  to  125  feet;  in  the  other  to  80 
feet.  The  act  was  upheld  as  a  proper  exercise  of  the 
police  power. 

The  decision  is  interesting  for  two  reasons.  In  the 
first  place,  the  court  recognized  that  the  division  of 
the  city  into  two  districts  for  the  purposes  of  build¬ 
ing  police  regulations  was  proper.  The  court  indi¬ 
cated  further  that  it  would  follow  the  decision  of  the 
highest  state  courts  as  to  the  propriety  of  the  limits 
assigned  to  the  districts,  as  it  considered  that  it  did 
not  itself  have  sufficient  knowledge  of  local  conditions 
to  reach  an  intelligent  conclusion  upon  this  point. 

In  the  second  place,  the  court,  while  recognizing 
as  proper  in  the  conditions  of  the  case  the  limitations 
as  to  height  of  buildings,  did  not  commit  itself  to  the 
general  proposition  that  all  legislative  regulation  of 
building  is  proper.  Its  position  on  this  point  would 
seem  to  be  similar  to  that  which  it  has  taken  with 
regard  to  labor  legislation,  viz.  that  the  constitutional¬ 
ity  of  the  state’s  action  is  in  large  measure  dependent 
upon  the  Supreme  Court’s  conception  of  the  reason¬ 
ableness  of  such  action  in  the  conditions  of  the  case. 

We  have  no  adjudications  upon  the  power  of  the 

1 214  U.  S.  91. 


GOVERNMENT  REGULATION  263 

legislature  to  provide,  as  is  done  in  the  German  cities, 
that  factories  or  other  particular  classes  of  buildings 
shall  not  be  erected  in  certain  districts  where  such 
factories  do  not  come  within  the  conception  of  nuis¬ 
ances.  While  it  is  possible  that  the  conception  of 
nuisance  may  be  so  widened  as  to  uphold  the  consti¬ 
tutionality  of  statutes  aimed  at  securing  in  this 
manner  a  proper  distribution  of  a  city’s  population, 
in  the  present  state  of  our  constitutional  law  it  is, 
to  say  the  least,  extremely  doubtful  whether  the 
courts  would  uphold  the  propriety  of  such  legisla¬ 
tion  on  this  ground.  It  is  conceivable,  however, 
that  the  desired  end  might  be  accomplished  through 
the  grant  of  the  power  to  license  factories  or  other 
specified  occupations  in  certain  districts.  For  the 
Supreme  Court  has  recognized  as  constitutional  the 
grant  of  very  wide  discretionary  powers  to  license 
where  the  exercise  of  such  powers  is  intended  to  pro¬ 
tect  the  public  health  or  safety,  and  has  not  been  in 
the  interest  of  some  particular  class  in  the  community.1 

In  some  cases  in  th  s  country  the  attempt  has  been 
made  to  classify  buildings,  not  so  much  from  the  point 
of  view  of  their  geographical  location,  as  from  that  of 
the  purpose  for  which  they  are  used.  Thus,  in  the 
state  of  New  York  there  is  a  law  called  the  Tenement 
House  Law  which  applies  to  all  tenement  houses  in 
cities  of  the  first  class  —  such  houses  being  defined 
as  houses  in  which  at  least  three  families  are  living. 
This  law  imposes  restrictions  on  tenement  houses 
which  are  not  imposed  on  other  buildings,  and  has, 
as  has  been  said,  been  upheld  by  the  state  courts, 

1  Wilson  v.  Eureka  City,  173  U.  S.  32;  Fischer  v.  St.  Louis,  194 
U.  S.  61. 


264  SOCIAL  REFORM  AND  THE  CONSTITUTION 


although  it  has  not  been  passed  upon  by  the  Supreme 
Court  of  the  United  States. 

It  is  very  commonly  believed  that  mere  building 
regulations,  i.e.  those  affecting  the  height  and  construc¬ 
tion  of  buildings  or  of  particular  classes  of  buildings 
and  the  percentage  of  the  lot  which  they  may  occupy, 
are  insufficient,  and  the  attempt  has  frequently  been 
made  to  prevent  room  congestion  by  providing  that 
rooms  shall  not  be  occupied  by  so  many  persons  as  to 
give  each  occupant  less  than  a  minimum  number  of 
cubic  feet  of  air  space.  If  these  laws  apply  equally 
to  all  houses  of  the  same  class,  there  would  seem  to  be 
no  constitutional  objection  to  them,  but  it  has  been 
held  in  some  of  the  state  courts  that  such  a  law, 
applying  only  to  lodging  houses  and  not  to  hotels 
and  boarding  houses  as  well,  is  unconstitutional  as 
denying  the  equal  protection  of  the  laws.1  The 
retroactive  character  of  such  legislation  w  uld  not  ap¬ 
parently  render  it  unconstitutional.2 

III.  Property  affected  with  a  Public  Interest 

The  effect  of  the  commerce  clause  of  the  federal 
constitution  upon  the  constitutionality  of  government 
regulation  of  quasi-public  enterprises  has  already 
been  treated.  All  that  need  be  said  here  is  that 
the  exclusive  power  of  Congress  to  regulate  foreign 
and  interstate  commerce,  does  not  interfere  with  the 
police  power  of  the  state,  except  so  far  as  action  taken 
under  that  power  is  inconsistent  with  action  taken  by 
Congress;  and  that  the  police  power  of  the  state 

1  Bailey  v.  People,  196  Ill.  28. 

2  Tenement  House  Dept.  v.  Moeschen,  179  N.  Y.  325. 


GOVERNMENT  REGULATION  265 

justifies  the  regulation  of  all  quasi-public  enterprises 
which  are  not  engaged  in  interstate  commerce. 

But  the  powers  of  both  the  states  and  of  the  United 
States  are  also  limited  by  the  provisions  of  either 
the  fourteenth  or  fifth  amendments  forbidding  those 
governments  to  deprive  any  person  of  his  life,  liberty, 
or  property  without  due  process  of  law,  while  the 
powers  of  the  states  are  further  limited  by  the  pro¬ 
vision  of  the  federal  constitution  that  no  state  shall 
pass  a  law  impairing  the  obligation  of  a  contract. 

The  Supreme  Court  of  the  United  States  has,  from 
the  viewpoint  of  these  limitations,  upheld  as  a  justi¬ 
fiable  exercise  of  the  general  police  power  almost  every 
sort  of  regulation  of  the  services  carried  on  by  quasi¬ 
public  enterprises,  which  has  attempted  to  promote 
the  safety,  health  and  convenience  of  the  public.1 

But  government  regulation  consists  not  merely  in 
the  attempt  to  promote  the  health,  safety,  and  con¬ 
venience  of  the  public,  but  includes  as  well  the  fixing 
of  the  rates  which  may  be  charged  for  quasi-public 
services. 

The  statement  of  the  constitutional  power  of  the 
government  in  the  regulation  of  rates  must,  as  has 

1  See  Johnson  v.  Southern  Pacific  Co.,  196  U.  S.  1 ;  Schlemmer  v. 
Buffalo,  Rochester,  &  Pittsburgh  R.  R.  Co.,  205  U.  S.  1,  which  impliedly 
recognized  the  constitutionality  of  the  Safety  Appliances  Acts  of 
Congress,  and  Railroad  Company  v.  Fuller,  17  Wallace,  560 ;  Henning- 
ton  v.  Georgia,  163  U.  S.  299;  Nashville  Chattanooga,  etc.,  Railway 
v.  Alabama,  128  U.  S.  96 ;  N.  Y.  N.  H.  &  H.  Ry.  Co.  v.  New  York,  165 
U.  S.  628,  which  upheld  the  police  power  of  the  state.  There  are, 
however,  a  few  cases  which  hold  that  states  may  not  pass  unreason¬ 
able  regulations  in  the  interest  of  the  convenience  of  passengers  which, 
e.g.,  oblige  interstate  trains  to  stop  at  particular  places  already  pro¬ 
vided  with  train  accommodations;  see  e.g.  Cleveland,  etc.,  Ry.  Co. 
v.  Illinois,  177  U.  S.  514. 


266  SOCIAL  REFORM  AND  THE  CONSTITUTION 

been  intimated,  be  made  with  all  the  provisions  of  the 
constitution  in  mind.  The  first  question  that  arises 
is  as  to  the  effect  upon  the  power  of  government  rate 
regulation  of  the  prohibition  to  deprive  any  person 
of  his  property  without  due  process  of  law. 

When  the  first  attempt  at  rate  regulation  was  made 
in  the  early  seventies,  it  was  contended  that  any  such 
attempt  was  improper.  But  it  was  determined  in  the 
first  case  coming  before  the  Supreme  Court  that  in 
principle  government  rate  regulation  of  quasi-public 
enterprises  —  or,  as  the  court  expressed  it,  “of  property 
affected  with  a  public  interest”  —  was  constitutional.1 
In  Munn  v.  Illinois,  two  principles  were  laid  down: 
first,  that  the  rate  charged  for  the  use  of  property 
affected  with  a  public  use  could  be  regulated  by  the 
legislature;  and  second,  that  the  courts  could  not 
revise  the  decision  of  the  legislature  as  to  what  was 
a  reasonable  rate.2 

In  reaching  this  decision  the  court  determined,  it  is 
true,  that  a  grain  elevator  or  warehouse  which  stored 
grain  for  hire  was  affected  with  a  public  interest,  and 
therefore  subject  to  regulation.  But  beyond  re¬ 
affirming  the  principle  laid  down  by  Chief  Justice 
Hale  that  when  private  property  “is  affected  with  a 
public  interest,  it  ceases  to  be  privati  juris  only,”  and 
giving  examples  of  such  property  as,  e.g.,  that  of  ferries, 
common  carriers,  hackmen,  bakers,  millers,  wharfin¬ 
gers  and  innkeepers,  the  court  did  not  in  its  opinion 
throw  much  light  on  the  question,  what  is  property 


1  Munn  v.  Illinois,  94  U.  S.  113;  see  also  Budd  v.  New  York,  143 
U.  S.  517. 

2  This  last  point  was  particularly  emphasized  in  Budd  v.  New 
York. 


GOVERNMENT  REGULATION  267 

affected  with  a  public  interest.  Mr.  Chief  Justice 
Waite  laid  down  the  general  rule  as  follows  : 

“  Property  does  become  clothed  with  a  public  interest  when 
used  in  a  manner  to  make  it  of  public  consequence  and  affect 
the  community  at  large.  When,  therefore,  one  devotes  his 
property  to  a  use  in  which  the  public  has  an  interest,  he,  in 
effect,  grants  to  the  public  an  interest  in  that  use,  and  must 
submit  to  be  controlled  by  the  public  for  the  common  good 
to  the  extent  of  the  interest  he  has  thus  created.  He  may 
withdraw  his  grant  by  discontinuing  the  use;  but,  so  long  as 
he  maintains  the  use,  he  must  submit  to  the  control.” 

The  broad  way  in  which  the  rule  is  stated  would 
apparently  recognize  a  right  in  the  legislature  both  to 
regulate  the  use  and  the  price  charged  for  the  use  of 
property  affected  with  a  public  interest,  and  itself 
to  determine  what  is  such  property.  The  legislature 
might  thus  regulate  the  rent  to  be  charged  for  property 
in  cities  where  such  rent  had  become  a  matter  vitally 
affecting  the  public  interest,  or,  as  the  English  Parlia¬ 
ment  has  done,  provide  for  some  official  method  of 
fixing  agricultural  rents  where  agrarian  questions  had 
assumed  great  importance,  as  they  have  apparently 
assumed  in  Ireland. 

Let  us  now  see  by  a  study  of  the  later  decisions  of 
the  Supreme  Court  whether  the  application  of  the  rule 
as  stated  by  Mr.  Chief  Justice  Waite  has  been  limited 
since  the  decision  in  Munn  v.  Illinois. 

In  the  Sinking  Fund  cases1  Mr,  Justice  Bradley,  who 
had  concurred  in  the  majority  opinion  in  the  Munn 
case,  said  with  reference  to  it : 

“  We  held  that  when  an  employment  or  business  becomes  a 
matter  of  such  public  interest  and  importance  as  to  create  a 

1  99  U.  S.  700,  747. 


I 


268  SOCIAL  REFORM  AND  THE  CONSTITUTION 


common  charge  or  burden  upon  the  citizen;  in  other  words, 
when  it  becomes  a  practical  monopoly  to  which  the  citizen  is 
compelled  to  resort  and  by  means  of  which  a  tribute  can  be 
exacted  from  the  community,  it  is  subject  to  regulation  by  the 
legislative  power.” 

This  statement,  though  made  in  a  dissenting  opinion 
was  approved  by  the  court  in  Budd  v.  New  York.1 
In  the  more  recent  cases  on  the  subject,  however,  the 
criterion  of  practical  monopoly  has  been  abandoned,2 
and  the  attempt  is  made,  as  in  Cotting  v.  Kansas 
City  Stockyards  Company,3  to  distinguish  between 
two  classes  of  property  subject  to  rate  regulation : 
first,  those  “in  which  a  public  service  is  distinctly  in¬ 
tended  and  rendered,  ”  apparently  placing  in  this  class 
common  carriers  and  such  enterprises  as  gas  and  water 
enterprises,  —  enterprises  to  which  government  powers 
like  the  power  of  eminent  domain  have  been  granted ; 
and  second,  “those  in  which  without  any  intent  of 
public  service  the  owners  have  placed  their  property 
in  such  a  position  that  the  public  has  an  interest  in 
its  use.”  With  regard  to  the  first  class,  Mr.  Justice 
Brewer  considers  that  the  powers  of  the  state  are 
greater  than  with  regard  to  the  second,  but  even  in  the 
case  of  the  second  class  he  believes  that  they  “cannot 
claim  immunity  from  all  state  regulation.”  In  the 
case  of  the  second  class,  e.g .,  government  regulation 
may  be  directed  only  to  securing  a  reasonable  charge 

1  143  U.  S.  517.  See  also  Spring  Valley  Waterworks  v.  Schattler, 
no  U.  S.  347,  354. 

2  Brass  v.  Stoesser,  153  U.  S.  391. 

s  183  U.  S.  79,  which  adds  to  property  “affected  with  a  public 
interest”  “stockyards  at  which  cattle  are  received  for  the  purpose 
of  exposing  and  have  the  same  exposed  for  sale  or  feeding  and  doing 
business  for  a  compensation.” 


GOVERNMENT  REGULATION 


269 


without  regard  to  the  profits  on  the  investment;  in  the 
case  of  the  former,  the  rate,  although  a  reasonable 
charge  for  the  service  rendered,  may  be  reduced  if  the 
profits  are  exorbitant. 

If  we  consider  that  in  the  case  of  the  second  class, 
i.e.  those  which  do  not  render  a  public  service  like 
that  rendered  by  a  common  carrier  or  public  service 
corporation,  the  affectation  with  a  public  interest 
is  to  be  determined,  as  was  intimated  in  Munn  v. 
Illinois,  by  the  fact  that  they  have  become  “of  public 
consequence  and  affect  the  community  at  large,” 
we  have  a  constitutional  basis  for  the  regulation 
of  the  rates  charged  by  a  great  corporation 
dealing  in  ordinary  commodities,  particularly  where 
such  a  corporation  has  “a  practical  monopoly.”  If 
it  be  said  that  such  a  corporation  is  not  affected  with 
a  public  interest  because  it  does  not  render  a  service, 
but  sells  a  commodity,  it  may  be  answered  that  there 
is  no  legal  or  economic  distinction  between  the  render¬ 
ing  of  a  service  and  the  sale  of  a  commodity.  The 
sale  of  food  products  such  as  bread  has,  e.g .,  long  been 
regulated  by  the  government.  If  again  it  be  said 
that  a  corporation  dealing  in  a  commodity  is  not 
obliged  to  sell  to  all  comers,  it  may  be  answered  that 
the  obligation  to  render  a  service  or  to  sell  a  commodity 
to  every  one  applying  is  not  the  reason  for  the  regu¬ 
lation.  Thus  in  Budd  v.  New  York  there  was  no  obli¬ 
gation  imposed  by  law  upon  the  elevator  owner  to 
render  services  to  every  one  asking  for  them,  and  the 
regulation  of  the  rates  demanded  for  the  services  ren¬ 
dered  was  upheld ;  and  in  Brass  v.  Stoesser1  the  obliga¬ 
tion  to  render  the  service  was  imposed  on  persons,  who 

1 153  U.  S.  391. 


270  SOCIAL  REFORM  AND  THE  CONSTITUTION 


formerly  were  under  no  obligation,  by  the  very  law 
which  fixed  the  rate. 

Property  is  then  affected  with  a  public  interest 
when,  by  reason  of  the  fact  that  it  is  a  practical  mo¬ 
nopoly  or  is  of  interest  to  the  public  owing  to  the  con¬ 
ditions  surrounding  it,  the  legislature  has  provided 
for  its  regulation.  There  are,  few  if  any,  cases  in  which 
the  courts  have  reversed  the  determinations  of  the 
legislature  as  to  what  is  property  affected  with  a  public 
interest,1  where  the  action  of  the  legislature  has  not 
been  violative  of  some  constitutional  provision  like  the 
one  preventing  a  state  from  denying  to  any  one  within 
its  jurisdiction  the  equal  protection  of  the  laws.2 

There  is  therefore  ground  for  the  belief  that  the  prices 
charged  by  great  corporations  engaged  in  the  manu¬ 
facture  and  sale  of  commodities  are  subject  to  govern¬ 
ment  regulation.  Thus,  in  State  v.  Drayton 3  a  law 
was  declared  constitutional  which  punished  the  inten¬ 
tional  discrimination,  for  the  purpose  of  destroying 
the  business  of  a  competitor  in  any  locality,  between 
different  sections,  communities,  or  cities  by  selling 
a  commodity  at  a  lower  rate  in  one  section  than  in 
another,  after  making  due  allowance  for  actual  cost 
of  transportation.  The  court  said,  in  answer  to  the 
contention  that  the  act  violated  the  fourteenth  amend¬ 
ment  and  was  not  a  proper  exercise  of  the  police 
power :  — 

“  The  legislature,  as  we  must  conclusively  presume,  acted  upon 
the  fullest  investigation,  and  upon  what  appeared  to  it  to  be  rea- 

1  See  cases  cited  in  Budd  v.  New  York,  143  N.  Y.  517;  McGehee, 
“Due  Process  of  Law,”  p.  315  ;  and  Brass  a.  Stoesser,  153  U.  S.  391. 

2  E.g.  see  Cotting  v.  Kansas  City  Stockyards  Co.,  183  U.  S.  79. 

3  82  Neb.  254. 


GOVERNMENT  REGULATION 


271 


sonable  grounds,  and,  as  must  be  also  assumed,  has  determined 
that  the  prohibition  of  the  reduction  of  the  price  of  commodi¬ 
ties  in  general  use  in  any  particular  locality  for  the  purpose  of 
destroying  the  business  of  a  competitor  in  such  locality  and  dis¬ 
criminating  ‘between  different  sections,  communities,  or  cities, 
by  underselling  at  the  point  of  competition  for  the  purpose 
named  would  be  conducive  to  ‘  the  general  welfare  ’  of  the  people 
compelled  to  purchase  such  commodities,  and  by  the  act  in 
question  has  sought  to  remedy  the  evil.  Has  it  not  the  power 
to  do  so  ?  .  .  .  When  we  take  into  consideration  that  it  is  not 
the  act  itself,  but  the  act  coupled  with  the  purpose  of  destroying 
the  business  and  property  of  others,  which  is  declared  criminal, 
we  find  little  trouble  in  arriving  at  the  conclusion  that  the  stat¬ 
ute  is  within  the  power  of  the  legislature  and  is  therefore  valid.” 

The  court  apparently  bases  its  decision,  however, 
rather  on  the  general  police  power  than  upon  the 
power  to  regulate  property  affected  with  a  public  in¬ 
terest.1 

Whether  the  courts  will  regard  with  favor  an  at¬ 
tempt  on  the  part  of  the  legislature  to  regulate  the 
rents  of  property  in  either  rural  or  urban  districts 
where  the  question  of  rents  has  become  one  of  vital 
interest  to  the  community  affected,  it  is  of  course 
impossible  to  say.  But  that  such  a  power  exists 
is  certainly  the  logical  effect  of  the  decisions  of  the 
Supreme  Court  of  the  United  States  with  regard 
to  the  power  of  the  legislature  over  property  affected 
with  a  public  interest.  It  is  well  also  to  remember 
that  the  British  Parliament  has  regulated  agricultural 
rents  in  Ireland,  while  in  the  early  part  of  the  nine¬ 
teenth  century  the  agrarian  question  became  so  im¬ 
portant  in  the  state  of  New  York  that  there  was 
placed  in  the  state  constitution  adopted  in  1846  the 

1See  also  State  v.  Central  Lumber  Co.  (S.  D.),  123  N.  W.  504. 


272  SOCIAL  REFORM  AND  THE  CONSTITUTION 


provision  that  “no  lease  or  grant  of  agricultural  land 
for  a  longer  period  than  twelve  years,  hereafter  made, 
in  which  shall  be  reserved  any  rent  or  service  of  any 
kind  shall  be  valid.”  1  In  Baltimore,  as  well,  abuses 
having  developed  in  connection  with  perpetual  ground 
rents,  have  led  to  the  imposition  by  law  of  a  limitation 
upon  the  right  of  leasing  land. 

The  second  principle  laid  down  in  Munn  v.  Illinois 
and  Budd  v.  New  York,  viz.  that  the  fixing  of  the  rate 
is  a  matter  of  legislative  discretion,  has  since  been 
modified.  In  later  cases  the  court  has  held  that  the 
fixing  of  a  rate  so  low  as  to  make  it  impossible  to 
obtain  a  fair  return  from  the  property  would  have 
the  effect  of  depriving  the  owner  of  his  property  with¬ 
out  due  process  of  law,  and  would  therefore  be  uncon¬ 
stitutional.2  In  the  two  latest  cases  on  the  subject,3 
the  court  has  stated  its  view  as  to  what  is  a  return 
which  is  not  so  low  as  to  result  in  confiscation.  It 
has  thus  held  that  six  per  cent  in  conditions  so  different 
as  those  existing  in  New  York  City,  on  the  one  hand, 
and  Knoxville,  Tennesee,  on  the  other,  is  not  confis¬ 
catory.  In  the  Knoxville  case  the  court,  further, 
refused  to  be  governed,  in  its  determination  as  to 
the  amount  of  property  upon  which  the  required  rate 
was  to  be  paid,  by  the  nominal  capitalization  of  the 
company,  saying  :  “Bonds  and  preferred  and  common 
stock  issued  under  such  conditions  [i.e.  in  excess  of 
value  furnished]  afford  neither  measure  of,  nor  guide 
to,  the  value  of  the  property,”  and,  in  both  the  Knox- 


1  Const.  Art.  i,  Sec.  14 ;  Const.  1894,  Art.  1,  Sec.  13. 

2  See  e.g.  Smyth  v.  Ames,  169  U.  S.  466. 

3  City  of  Knoxville  v.  Knoxville  Water  Co.,  212  U.  S.  1;  Willcox 
v.  Consolidated  Gas  Co.,  ibid,  19. 


GOVERNMENT  REGULATION 


273 


ville  case  and  the  New  York  case,  held  that  that 
amount  was  to  be  determined  by  an  ascertainment 
of  the  actual  value  of  the  plant  at  the  time  the  regu¬ 
latory  act  went  into  effect.  Finally,  in  the  Knoxville 
case,  no  allowance  for  the  value  of  any  franchise 
was  made  by  the  court.  In  the  New  York  case  the 
court  did  permit  a  value  to  be  given  to  the  franchises, 
but  only  because  the  act  of  the  state  legislature 
authorizing  the  consolidation  of  the  companies  put 
a  value  on  the  franchises,  and  this  was  regarded  as  a 
contract  whose  obligation  could  not  be  impaired  by 
subsequent  legislation. 

In  the  second  place,  the  power  of  a  state  may  be 
limited  by  the  provision  in  the  constitution  prohibit¬ 
ing  a  state  from  passing  any  law  impairing  the  obli¬ 
gation  of  a  contract.  Even  where  a  law  regulating 
rates  would  not  deprive  any  person  of  his  property 
without  due  process  of  law,  it  might  be  unconstitu¬ 
tional  as  impairing  the  obligation  of  a  contract.  The 
Supreme  Court,  however,  does  not  regard  with  favor 
the  idea  that  the  state  can  contract  away  for  all 
time  its  power  to  regulate  rates,  which  is  regarded 
as  a  part  of  the  police  power,1  and  has  seldom,  if  ever, 
held  that  a  railway  or  other  similar  corporation  has 
a  contract  with  the  state  unamendable  by  the  legis¬ 
lature  in  accordance  with  which  it  is  relieved  forever 
from  the  regulatory  power  of  the  legislature  as  to 
rates.2 

But  the  court  has  held  that  the  legislature  may 
authorize  municipal  corporations  to  make  for  a  fixed 

1  Stone  v.  Farmers  Loan  &  Trust  Co.,  116  U.  S.  307;  Covington, 
etc.,  Turnpike  Co.  v.  Sandford,  164  U.  S.  578,  587. 

2  See  note,  62  Am.  St.  Rep.  295. 


274  SOCIAL  REFORM  AND  THE  CONSTITUTION 

term  of  a  reasonable  length  contracts  with  public 
service  companies  in  accordance  with  which  certain 
rates  may  be  charged,  and  that  attempts  on  the  part 
of  such  municipal  corporations  to  modify  by  ordi¬ 
nance  the  terms  of  such  contracts  are  invalid.1  Any 
attempt  upon  the  part  of  a  municipal  corporation 
to  make  such  contract  when  not  clearly  authorized 
thereto  by  the  state  legislature,  will,  however,  be  in¬ 
effectual.2 


IV.  Regulation  by  Taxation 

It  has  been  said  that  the  modern  program  of  social 
reform  makes  use  of  the  power  of  taxation  for  social 
rather  than  fiscal  purposes.  Thus  progressive  rates 
of  taxation  are  imposed  with  the  idea  of  discouraging 
the  accumulation  of  large  fortunes;  or  taxes  are  im¬ 
posed  on  land  alone;  while  improvements  on  the  land 
are  exempted;  or  taxes  are  imposed  on  the  increment 
of  land  values,  not  so  much  in  the  belief  that  larger 
amounts  of  money  will  be  realized  thereby,  but  in 
order  that  encouragement  may  be  given  to  building, 
while  the  holding  of  land  for  rise  in  value  may  be  dis¬ 
couraged,  and  in  order  that  the  congested  population 
conditions  incident  to  urban  life  may  be  remedied. 

Are  these  purposes  of  taxation  improper,  and  are 
these  various  kinds  of  taxation  unconstitutional,  as 
depriving  the  taxpayer  of  his  property  without  due 
process  of  law,  or  as  denying  him  the  equal  protection 
of  the  laws?  In  order  to  answer  these  questions, 
we  must  have  recourse  to  the  fundamental  principles 

1  Detroit  v.  Detroit  Citizens  St.  Ry.  Co.,  184  U.  S.  368;  Minne¬ 
apolis  v.  Minneapolis  St.  Ry.  Co.,  215  U.  S.  417. 

2  Home  Telephone,  etc.,  Co.  v.  Los  Angeles,  21 1  U.  S.  65. 


GOVERNMENT  REGULATION 


275 


of  taxation,  some  of  which  are  regarded  as  so  axiomatic 
that  we  have  no  provisions  in  the  constitutions  regard¬ 
ing  them  and  no,  or  almost  no,  decisions  exactly  in 
point. 

One  of  these  fundamental  principles  is  that  the 
courts  have  no  control  over  the  motives  which  may 
lead  legislatures  to  impose  taxes,  provided  the  pur¬ 
pose  for  which  the  money  raised  is  spent  is  a  public 
one.  Thus  the  legislature  may  impose  a  protective 
tariff  if  it  sees  fit,  with  the  purpose  of  encouraging 
home  manufactures,  or  it  may  impose  a  tax  with  the 
idea  of  destroying  the  occupation  subjected  to  the  tax. 
The  first  enunciation  of  the  principle  that  the  power 
to  tax  is  the  power  to  destroy  was  made  by  Marshal 
in  the  celebrated  case  of  McCulloch  v.  Maryland,1 
where  it  was  made  one  of  the  rationes  decidendi, 
and  may  therefore  be  regarded  as  one  of  the  things 
actually  decided.  Later  the  principle  was  even  more 
clearly  formulated  and  enunciated  in  Veazie  Bank  v. 
Fenno,2  where  the  power  to  tax  was  exercised  for  the 
purpose  of  destroying  the  note  circulation  of  state 
banks.  So,  we  may  say,  the  legislative  authority 
may  resort  to  the  power  of  taxation  for  any  motive 
which  seems  to  it  to  be  proper,  provided  its  action 
violates  no  other  constitutional  principle,  as,  e.g.,  that 
the  purpose  for  which  money  raised  by  taxation  must 
be  public. 

In  the  second  place,  in  the  absence  of  specific  con¬ 
stitutional  restriction,  the  legislative  authority  may 
select  for  taxation  such  objects,  classes  of  individuals, 
processes,  operations,  and  occupations  as  it  sees  fit, 
and,  as  a  corollary,  may  exempt  such  as  it  sees  fit. 

1  4  Wheaton,  316.  2  8  Wall.  533. 


276  SOCIAL  REFORM  AND  THE  CONSTITUTION 


The  only  universal  constitutional  principle  which 
may  be  said  to  limit  the  powers  of  the  legislature  in 
this  respect  is  that  which  provides  for  uniformity 
of  taxation,  or  equal  protection  of  the  laws.  This 
principle  has  been  held,  however,  not  in  and  of  it¬ 
self  to  limit  seriously  the  power  of  the  legislature. 
Thus,  the  Supreme  Court  has  held  that  the  legislative 
authority  may  provide  for  reasonable  classification  of 
taxable  subjects,  i.e.  may  tax  railways,  while  exempt¬ 
ing  other  corporations;1  may  tax  corporations,  while 
exempting  other  individuals ;  2  may  tax  the  transfer 
of  property  by  will,  while  exempting  other  transfers 
of  property;3  may  tax  sales  at  exchanges  while 
exempting  other  sales; 4  and  so  on,  ad  infinitum. 

The  Supreme  Court  has  furthermore  held  that 
classification  is  proper  where  it  is  based  on  a  varia¬ 
tion  of  rate  rather  than  on  a  variation  in  the  sub¬ 
jects  taxed,  and  that  therefore  progressive  taxation 
is  proper,  i.e.  that  the  rate  may  vary  inversely  or 
directly  in  accordance  with  some  reasonable  standard. 
The  most  notable  example  is  found  in  the  taxation 
of  inheritances  where  the  rate  may  vary  inversely 
with  the  degree  of  relationship  of  the  legatee  to  the 
deceased,  or  directly  with  the  amount  of  the  legacy.5 
There  is  probably  one  limitation,  however,  upon  this 
power  of  classification,  viz.  that  taxability,  or  the 
rate  of  taxation,  may  not  be  made  dependent  upon 
the  character  of  the  ownership  of  property,  i.e.  prop- 

1  Kentucky  R.  R.  Tax  cases,  115  U.  S.  321. 

2  Home  Ins.  Co.  v.  New  York,  134  U.  S.  194. 

3  Orr  v.  Gilman,  183  U.  S.  278;  Knowlton  v.  Moore,  178  U.  S.  41 

4  Nicol  v.  Ames,  173  U.  S.  509. 

5  Magoun  v.  Illinois,  etc.,  Bank,  170  U.  S.  283 ;  Knowlton  v.  Moore, 
178  U.  S.  41. 


GOVERNMENT  REGULATION 


277 


erty  may  not  be  selected  for  taxation  because  it  is 
owned  by  a  nonresident,  or  because  it  is  the  property 
of  a  corporation,  where  the  property  of  residents  or 
individuals,  respectively,  is  not  taxed.1 

Furthermore,  under  the  specific  limitations  of 
certain  state  constitutions,  it  is  unquestionably  the 
case  that  less  freedom  is  accorded  the  legislature. 
Thus,  where  the  constitution  specifically  provides 
for  uniformity  of  taxation,  all  property  except  certain 
minor  exemptions  must  be  taxed,  and  progressive 
rates  of  taxation  are  sometimes  regarded  as  improper. 

In  the  third  place,  the  rate  of  taxation  adopted  is, 
in  the  absence  of  specific  constitutional  provisions, 
absolutely  in  the  discretion  of  the  legislature.  It 
is  partly,  at  any  rate,  because  of  the  existence  of 
this  principle  that  the  power  to  tax  is  the  power  to 
destroy. 

These  being  the  fundamental  principles  with  regard 
to  taxation,  what  is  the  answer  we  are  to  give  to 
the  question  as  to  the  constitutionality  of  the  more 
important  taxes  which  modern  social  reformers  demand 
should  be  imposed?  These  taxes  are  income  taxes, 
taxes  on  the  unimproved  value  of  land,  taxes  on  the 
increment  of  land  value,  and,  finally,  taxes  having 
progressive  rates. 

First ,  the  income  tax.  It  may  be  assumed  without 
argument  that  the  only  income  tax  which  need  be 
discussed  is  a  federal  income  tax.  The  constitution¬ 
ality  of  such  a  tax  is  dependent  upon  the  meaning 
which  is  given  a  special  provision  of  the  federal 
constitution,  viz.  that  which  provides  that  direct 

1  See  e.g.  Matter  of  Pell,  171  N.  Y.  48;  County  of  Santa  Clara  v. 

Southern  Pac.  R.  R.  Co.,  18  Fed.  385. 

•» 


278  SOCIAL  REFORM  AND  THE  CONSTITUTION 

taxes  shall  be  apportioned  among  the  several  states 
in  accordance  with  population.  As  an  apportioned 
income  tax  would  work  such  injustice  that  no  Congress 
would  even  consider  its  adoption,  our  question  resolves 
itself  into  whether  an  unapportioned  federal  income 
tax  is  a  direct  tax,  and,  therefore,  unconstitutional. 
The  last  income  tax  cases  decided  this  question  in 
the  affirmative  so  far  as  the  income  which  was  taxed 
was  derived  from  property  either  real  or  personal. 
But  recent  cases  have  recognized  that  a  tax  on  the 
incomes  of  persons  or  a  class  of  persons  such  as  cor¬ 
porations  engaged  in  business  is  not  direct,  and  there¬ 
fore,  although  not  apportioned,  is  proper.1  The  rea¬ 
soning  of  the  court  in  these  as  well  as  former  cases 
would  lead  to  the  conclusion  that  a  tax  on  income 
derived  from  labor  also  is  proper.2 

We  may  therefore  say  that  a  federal  income  tax  on 
the  income  of  accumulated  wealth,  not  apportioned 
among  the  states,  is  not  constitutional.  Such  wealth 
can  be  reached  by  a  federal  unapportioned  tax  only 
indirectly  through  the  taxation  of  the  businesses  in 
which  such  wealth  is  invested. 

Second ,  taxes  on  the  unimproved  value  of  land. 
There  would  seem  to  be  no  objection  based  upon  the 
federal  constitution  to  these  taxes,  provided  that 
when  imposed  by  the  federal  government  they  are 
apportioned  among  the  states  according  to  popula¬ 
tion.  Inasmuch  as  the  value  of  land  is  in  large 
measure  dependent  on  population,  and  varies  almost 
directly  with  the  population,  a  federal  apportioned 

1  Spreckles  Sugar  Refining  Co.  v.  McClain,  192  U.  S.  397;  Flint 
v.  Stone  Tracy  Co.,  Sup.  Court,  October  term,  1910. 

2  Springer  v.  United  States,  102  U.  S.  5S6. 


GOVERNMENT  REGULATION 


279 


tax  on  the  unimproved  value  of  land  would  not  work 
serious  injustice. 

State  taxes  of  this  character  might,  however,  be 
regarded  as  improper  under  the  provisions  of  certain 
state  constitutions,  but  in  other  states  would  be  upheld 
as  a  result  of  the  application  of  the  principle  according 
to  the  legislature  absolute  discretion  in  the  selection 
of  the  things  to  be  taxed.  1 

The  same  reasons  which  would  render  constitutional 
taxes  on  the  unimproved  value  of  land,  would  also 
justify  the  imposition  of  different  tax  rates  on  the  land 
value  and  on  the  value  of  the  improvements  on  the 
land.  That  is,  there  is  no  constitutional  objection 
to  either  of  these  taxes  based  on  the  federal  consti¬ 
tution,  and  none  from  the  point  of  view  of  the  state 
constitution  in  those  states  like  New  York  which  do 
not  require  strict  conformity  in  taxation. 

Third ,  taxes  on  the  increment  of  land  value.  What 
has  been  said  with  regard  to  the  power  of  the  federal 
government  to  impose  taxes  on  the  unimproved  value 
of  land  may  be  repeated  with  regard  to  taxes  on  the 
increment  of  land  value.  Both  taxes  would  be  on 
land,  both  would  therefore  be  direct,  and  both  would 
have  to  be  apportioned.  It  is  possible  that  profits 
derived  from  the  sale  of  land  might  be  taxed  as  cor¬ 
porate  profits  under  a  federal  corporation  tax,  with¬ 
out  apportionment. 

When,  however,  we  come  to  a  consideration  of 
the  power  of  the  states,  the  conditions  are  somewhat 
different.  At  a  very  early  time  in  our  history  resort 

1  See  e.g.  People  v.  Ronner,  185  N.  Y.  285,  where  an  act  of  the  legis¬ 
lature  of  the  state  of  New  York  was  upheld  as  constitutional  which 
selected  mortgages  for  taxation  at  a  special  rate. 


280  social  reform  and  the  constitution 


was  had  to  a  method  of  taxation  which  has  since 
come  to  be  known  as  assessment  for  local  benefit. 
It  was  justified  from  the  point  of  view  of  expediency 
on  the  theory  that  property  specially  benefited  by 
some  local  improvement  should  be  specially  taxed 
for  that  improvement.  It  was  justified  from  the 
point  of  view  of  its  constitutionality  on  the  theory 
that  the  legislature  had  almost  unlimited  discretion 
in  the  distribution  of  the  burden  of  taxation,  and 
could  therefore  determine  that  particular  property 
should  be  selected  for  taxation  for  particular  pur¬ 
poses.  This,  e.g .,  is  the  view  of  the  Court  of  Appeals 
of  the  state  of  New  York,  in  which  this  method  orig¬ 
inated.1  It  is  also  the  view  which  was  subsequently 
taken  by  the  Supreme  Court  of  the  United  States.2 
It  is  not,  however,  the  view  approved  by  the  courts 
of  most  of  the  states,  which  have  claimed  the  right 
to  review  the  determination  of  the  legislature  that 
particular  property  was  benefited  by  particular  im¬ 
provements. 

In  states,  therefore,  where  a  strict  uniformity  in 
property  taxation  is  required,  an  increment  of  land 
value  tax  which  did  not  provide  for  the  expenditure 
of  the  proceeds  of  the  tax  in  such  a  way  as,  in  the 
opinion  of  the  court,  to  benefit  the  land  whose  incre¬ 
ment  of  value  was  taxed,  might  conceivably  be  re¬ 
garded  as  either  violating  the  principle  of  uniformity, 
if  considered  as  a  tax  pure  and  simple,  or  as  not  bene¬ 
fiting  the  property,  if  considered  as  an  assessment  for 
local  benefit. 

But  from  the  point  of  view  of  the  federal  consti- 

1  People  v.  Mayor,  4  N.  Y.  419. 

2  French  v.  Barber  Asphalt  Paving  Co.,  181  U.  S.  324. 


GOVERNMENT  REGULATION 


281 


tution,  there  would  apparently  be  no  objection  to 
such  a  tax.  In  states  having  a  liberal  constitution, 
like  that  of  New  York,  it  would  be  upheld  as  a  tax 
pure  and  simple,  and  if  the  proceeds  of  the  tax  were 
devoted  to  undertakings  which  could  be  shown  to 
benefit  the  property  taxed,  it  could  be  upheld  in  other 
states  as  a  local  assessment. 

It  would  seem,  therefore,  that  everywhere  through¬ 
out  the  country,  a  tax  on  the  increment  of  land  value 
in  a  city  would  be  proper  if  the  proceeds  of  the  tax 
were  placed  in  a  fund  from  which  improvements 
shown  to  benefit  the  whole  city  should  be  paid  for, 
particularly  if  the  tax  were  low.  For,  under  these 
conditions,  it  would  not  be  said  in  a  particular  case 
that  the  tax  imposed  exceeded  the  benefit  conferred, 
which  might  be  presumed  from  the  actual  increment 
of  value  of  the  l-and  upon  which  the  tax  was  imposed. 

In  states  like  New  York,  where  it  could  be  justified 
as  a  tax  pure  and  simple,  the  rate  might  be  made  much 
higher,  for  it  would  not  be  so  necessary  to  show  a 
direct  relation  between  the  increment  of  value  and 
the  benefit. 

Fourth ,  progressive  taxation.  There  is  no  constitu¬ 
tional  objection  imposed  by  the  federal  constitution 
to  progressive  taxation.  The  provision  that  duties, 
imposts,  and  excises  shall  be  uniform  throughout  the 
United  States  has  been  held  by  the  Supreme  Court 
to  require  merely  geographical  uniformity,1  and  pro¬ 
gressive  inheritance  taxation  has  been  upheld,  although 
it  must  be  admitted  that  the  court  has  intimated  that 
the  progression  might  be  so  excessive,  or  be  dependent 
upon  such  unreasonable  conditions,  as  to  be  improper. 

1  Knowlton  v.  Moore,  178  U.  S.  41. 


282  SOCIAL  REFORM  AND  THE  CONSTITUTION 


The  court  thus  has  said:  “It  may  be  doubted  by 
some,  aside  from  express  constitutional  restrictions, 
whether  the  taxation  by  Congress  of  the  property 
of  one  person  accompanied  with  an  arbitrary  provision 
that  the  rate  of  tax  should  be  fixed  with  reference  to 
the  sum  of  the  property  of  another,  thus  bringing 
about  the  profound  inequality,  which  we  have  noticed, 
would  not  transcend  the  limitations  arising  from  those 
fundamental  conceptions  of  free  government  which 
underlie  our  constitutional  system.” 1  This  was  said 
with  regard  to  the  contention  that  the  act  of  Congress 
under  consideration  fixed  the  rate  of  tax  imposed  on 
a  given  legacy  in  accordance  with  the  size  of  the  entire 
estate  of  which  the  legacy  had  been  a  part.  The 
court  held  that  the  act  could  not  be  given  that  inter¬ 
pretation,  and  therefore  did  not  consider  itself  called 
upon  to  decide  upon  the  constitutionality  of  such  an 
act.  So  all  we  have  on  this  question  is  an  expression 
of  doubt  as  to  whether  the  rate  of  tax  imposed  on  a 
distributive  share  in  an  estate  may  be  made  to  vary 
with  the  amount  of  the  entire  estate. 

The  Supreme  Court  of  the  United  States  has  also 
decided  that  the  federal  constitution  imposes  no 
obstacle  to  progressive  taxation  by  states,  provided 
that  the  classification  upon  which  the  progression  is 
based  is  reasonable.  What  is  a  reasonable  classifi¬ 
cation  is  not  stated,  but  it  has  been  held  or  intimated 
that  neither  individuals  nor  classes  may  be  selected 
for  taxation,  where  the  classification  is  based  on  race, 
religion,  residence,  or  any  other  arbitrary  basis.2  In 
the  Magoun  case  it  was  held  that  the  rate  might 

1  Knowlton  v.  Moore,  178  U.  S.  41. 

2  Magoun  v.  Illinois,  etc.,  Bank,  170  U.  S.  283. 


GOVERNMENT  REGULATION 


283 


progress  directly  with  the  amount  of  the  legacy,  and 
inversely  with  the  degree  of  relationship  to  the 
deceased.  It  may  therefore  be  said  that  progressive 
taxation,  based  on  the  value  of  the  distributive  shares 
of  an  estate,  is  perfectly  proper  so  far  as  concerns  the 
federal  constitution. 

State  constitutions,  however,  are  sometimes  con¬ 
strued  as  forbidding  it,1  but,  as  has  been  said,  state 
constitutions  may  be  amended,  and  if  state  courts 
take  a  more  conservative  view  of  the  federal  consti¬ 
tution  than  does  the  Supreme  Court,  it  is  competent 
for  Congress  to  enlarge  the  appellate  jurisdiction  of 
that  court  so  as  to  permit  it  to  bring  the  conservative 
courts  into  line. 

There  are,  therefore,  few,  if  any,  permanent  consti¬ 
tutional  objections  to  the  imposition  of  those  taxes 
whose  imposition  is'  demanded  by  social  reformers 
of  the  present  day.  The  most  important  tax  which 
may  not  be  imposed  at  the  present  time  is  an  unap¬ 
portioned  general  income  tax  levied  by  the  federal 
government.  But,  as  has  been  pointed  out,  the 
income  from  business  may  be  taxed,  and  in  this  manner 
most  accumulated  wealth  outside  of  land  could  be 
reached  by  an  unapportioned  tax,  while  the  increment 
of  land  value,  and  even  the  income  from  land  value, 
could  be  taxed  by  means  of  an  apportioned  federal  tax. 

V.  Regulation  of  Monopoly 

The  power  of  the  legislative  department  of  the 
government  to  prohibit  arrangements  in  the  form  of 
contracts,  agreements,  or  otherwise  in  restraint  of 

1  See  e.g.  State  v.  Switzler,  143  Mo.  287. 


284  SOCIAL  REFORM  AND  THE  CONSTITUTION 

trade  has  always  been  admitted  in  the  United  States. 
Indeed,  the  policy  of  American  law  has  from  an  early 
time  been  to  discourage  the  restraint  of  trade.  Thus 
the  courts  have  refused  to  recognize  the  enforce¬ 
ability  by  civil  action  of  agreements  whose  purpose 
or  effect  was  in  their  opinion  to  limit  production  or 
to  control  prices,1  have  punished  criminally  under 
general  statutes  forbidding  conspiracies  combinations 
of  persons  engaged  in  trade  which  stifled  competition, 
or  under  which  competition  might  be  stifled ; 2  and  in 
a  number  of  cases  have  dissolved  corporations  which 
have  either  joined  in  a  combination  or  have  been 
organized  for  the  purpose  of  monopoly,  where  the 
law  either  prohibited  conspiracies  in  restraint  of 
trade  or  provided  that  corporations  could  be  formed 
for  any  lawful  purpose.3 

The  assignment  to  Congress  of  the  power  to  regu¬ 
late  commerce  with  foreign  nations  and  among  the 
several  states,  and  the  consequent  division  of  the  field 
of  commerce  into  two  parts,  into  one  of  which  the 
states  were  not  to  enter,  and  the  other  of  which  was 
closed  to  the  national  government,  naturally  has 
resulted  in  the  imposition  of  limitations  on  the  exer¬ 
cise  of  governmental  power  which  have  caused  a 
certain  amount  of  embarrassment.  At  the  same  time, 
the  fundamental  theory  that  commerce  or  trade  may 
be  regulated  in  the  interest  of  securing  some  desired 
result,  e.g.  competition,  has  been  rather  strengthened 

1  Craft  v.  McConaughy,  79  Ill.  346 ;  Nester  v.  The  Continental 
Brewing  Co.,  161  Pa.  St.,  473. 

2  People  v.  Sheldon,  139  N.  Y.  251. 

3  State  v.  Standard  Oil  Co.,  49  Ohio,  137;  People  v.  Chicago  Gas 
Trust  Co.,  130  Ill.  268;  Distilling  &  Catttle  Feeding  Co.,  v.  People, 
156  Ill.  448;  People  v.  The  Milk  Exchange,  145  N.  Y.  267. 


GOVERNMENT  REGULATION  285 

or  emphasized  than  weakened  by  the  insertion  in 
the  federal  constitution  of  the  commerce  clause. 

There  are,  however,  other  clauses  in  the  federal 
constitution  which  may  be  regarded  as  limiting  the 
extent  both  of  the  regulatory  power  of  Congress  over 
foreign  and  interstate  commerce,  expressly  recog¬ 
nized  in  the  constitution,  and  of  the  power  of  the  states 
over  intrastate  commerce,  which  judicial  interpre¬ 
tation  of  the  constitution  has  accorded  to  them. 

Thus  neither  the  federal  nor  the  state  government 
may  deprive  any  person  of  his  life,  liberty,  or  property 
without  due  process  of  law,  while  the  states  may  not 
deny  to  any  person  within  their  jurisdiction  the  equal 
protection  of  the  laws.1  What  the  effect  of  the  fifth 
amendment  is  upon  the  power  of  Congress  to  prevent 
combinations  in  restraint  of  foreign  and  interstate 
commerce,  has  not  been  decided.  It  would  appear 
that  the  limitation  would  affect  rather  the  methods 
which  Congress  may  adopt  in  order  to  secure  the 
desired  result  than  the  rule  of  conduct  which  it  may 
lay  down.  Up  to  the  present  time  the  controversy 
has  been  waged  almost  exclusively  over  the  question 
whether  Congress  has,  as  a  matter  of  fact,  attempted 
to  prohibit  all  restraint  of  commerce  or  only  unreason¬ 
able  restraint.  It  is  probably  impossible  at  the  pres¬ 
ent  day  to  say  whether  the  Anti-Trust  Act  of  1890, 
which  is  practically  the  only  attempt  Congress  has  made 
to  prevent  restraints  of  commerce,  prevents  all  restraints 
or  only  unreasonable  restraints.  In  United  States 
v.  Trans-Missouri  Freight  Association2  and  United 
States  v.  Joint  Traffic  Association 3  it  would  seem  that 
the  view  of  the  Supreme  Court  was  that  all  restraints  of 
1  Amendments  V  and  XIV.  2  166  U.  S.  290.  3 171  U.  S.505. 


286  SOCIAL  REFORM  AND  THE  CONSTITUTION 

trade  had  been  prohibited,  but  in  the  Northern  Securi¬ 
ties  case 1  the  adherence  of  Mr.  Justice  Brewer  to  the 
opinion  of  the  four  who  believed  the  Northern  Securi¬ 
ties  Company  had  acted  illegally,  was  given  under  the 
belief  that  the  restraint  complained  of  both  in  that 
case  and  in  the  other  cases  which  have  been  mentioned 
was  unreasonable,  and  in  the  recently  decided  Stand¬ 
ard  Oil  Company  and  American  Tobacco  Company 
cases  the  majority  opinion  laid  great  stress  on  the  view 
that  the  restraint  prohibited  was  only  an  unreason¬ 
able  one.  It  is  worthy  of  note,  however,  that  the 
prosecution  in  most  of  the  cases  arising  under  the 
Anti-Trust  Act  has  been  successful. 

Most  of  the  methods  which  have  been  provided 
to  prevent  the  restraint  of  commerce  have  been 
approved  by  the  Supreme  Court.  Thus,  in  Con¬ 
tinental  Wall  Paper  Company  v.  Voight 2  the  first 
section  of  the  United  States  Anti-Trust  Act  making 
contracts  in  restraint  of  trade  illegal  was  applied  so  as  to 
prevent  a  combination  from  recovering  the  purchase 
price  of  goods  sold  a  purchaser  under  a  contract  of 
sale  in  restraint  of  trade ;  in  the  Northern  Securities 
case  the  equity  jurisdiction  of  the  United  States  in 
the  issue  of  restraining  orders  was  upheld,  and  in 
Montague  &  Co.  v.  Lowry 3  the  action  for  threefold 
damages  suffered  by  one  injured  by  the  unlawful 
restraint  was  sustained.  As  yet,  however,  we  have 
no  determination  by  the  Supreme  Court  as  to  the 
constitutionality  of  the  provision  of  the  Anti-Trust 
Act  imposing  a  criminal  punishment  upon  those 
violating  the  act,  or  of  that  decreeing  the  forfeiture 
and  condemnation  of  any  property  owned  under  any 
1  193  U.  S.  197.  2  212  U.  S.  227.  3  193  U.  S.  38. 


GOVERNMENT  REGULATION 


287 


illegal  combination  and  being  the  subject  thereof 
and  being  in  course  of  transportation  from  one  state 
to  another  or  to  a  foreign  country.  But  the  logic 
of  the  decision  in  Waters- Pierce  Company  v.  Texas, 1 
which  upheld  a  large  criminal  penalty  for  violation  of 
a  state  anti-trust  act,  would  seem  to  prove  the  con¬ 
stitutionality  of  the  criminal  provisions  of  the  United 
States  Anti-Trust  Act. 

The  power  reserved  by  the  states  to  regulate  intra¬ 
state  commerce  has  also  always  been  regarded  as 
justifying  the  passage  of  anti-trust  acts  by  the  State 
legislatures  provided  such  acts  did  not  in  the  opinion 
of  the  courts  violate  the  provisions  of  the  fourteenth 
amendment  or  similar  provisions  in  the  state  consti¬ 
tutions.  There  are  some  decisions  in  the  state  courts 
which  seriously  limit  the  effectiveness  of  these  acts 
attempting  to  prevent  restraint  of  intrastate  com¬ 
merce.  These  decisions  are  not,  however,  of  great  im¬ 
portance  since,  as  has  been  pointed  out,  either  the  state 
constitutions  may  be  amended,  or  the  power  may  be 
given  by  Congress  of  appealing  to  the  Supreme  Court 
from  the  decisions  of  state  courts  holding  unconstitu¬ 
tional  from  the  point  of  view  of  the  federal  constitu¬ 
tions  acts  of  the  state  legislature. 

Here  as  elsewhere  the  important  question  is  what 
is  the  attitude  of  the  Supreme  Court  of  the  United 
States  towards  the  acts  of  state  legislatures  attempt¬ 
ing  to  prevent  restraints  of  intrastate  commerce. 
Our  discussion  here  must  be  directed  in  the  first 
place  to  the  consideration  of  the  effect  of  the  fourteenth 
amendment  upon  the  power  of  the  state  to  forbid 
combinations  in  restraint  of  trade.  It  may  be  said 

1  212  U.  S.  86. 


288  SOCIAL  REFORM  AND  THE  CONSTITUTION 


that  the  fourteenth  amendment  does  not  in  any  way 
limit  the  power  of  the  state  to  provide  for  the  rule 
of  competition  or  to  forbid  restraints  of  strictly  intra¬ 
state  commerce,  provided  the  rule  is  made  applicable 
to  all  persons  in  similar  conditions.1  One  of  the  latest 
decisions  of  the  court  upon  this  subject,  viz.  Grenada 
Lumber  Co.  v.  Mississippi 2  held  that  the  fourteenth 
amendment  was  not  violated  by  a  state  statute  which 
was  so  interpreted  by  the  state  court  as  to  authorize 
the  dissolution  of  a  voluntary  association  of  retail 
lumber  dealers,  because  the  purpose  of  such  associa¬ 
tion  as  expressed  in  its  articles  of  agreement  was  to 
“buy  only  from  manufacturers  and  wholesalers  who 
do  not  sell  direct  to  consumers”  and  “not  to  buy 
from  lumber  commission  merchants,  agents,  and 
brokers  who  sell  to  consumers.” 3 

The  power  of  a  state,  somewhat  arbitrary  in  char¬ 
acter  to  prevent  a  foreign  corporation  from  engaging 
within  its  borders  in  intrastate  business,  further¬ 
more,  has  been  held  to  free  a  state  from  the  limita¬ 
tions  of  the  fourteenth  amendment,  in  the  sense  that  it 
permits  the  state  to  take  action  with  regard  to  foreign 

1  Thus  the  Supreme  Court  held  unconstitutional  as  denying  the 
equal  protection  of  the  laws  a  state  anti-trust  act  which  exempted 
from  its  provisions  agricultural  products  or  live  stock  while  in  the 
hands  of  the  producer  or  raiser.  Connolly  v.  Union  Sewer  Pipe  Co., 
184  U.  S.  540,  556. 

2  217  U.  S.  433. 

3  See  also  Smiley  v.  Kansas,  196  U.  S.  447 ;  National  Cotton  Oil 
Co.  v.  Texas.,  197  U.  S.  115.  These  cases  hold  acts  constitutional 
which  made  illegal  combinations  among  manufacturers  and  buyers 
to  lower  the  price  of  products  which  they  wished  to  buy.  See  also 
Standard  Oil  Co.  v.  Kentucky,  217  U.  S.  413,  where  the  transaction 
complained  of  was  inducing  merchants  in  the  state  by  an  agreement 
to  give  them  three  hundred  gallons  of  oil  to  revoke  orders  on  a  rival 
company  for  oil  to  be  shipped  from  another  state. 


GOVERNMENT  REGULATION  289 

corporations  which  it  would  not  be  authorized  in 
taking  with  regard  to  natural  persons.  Thus,  in 
Hammond  Packing  Company  v.  Arkansas  1  the  court 
held  constitutional  an  act  under  which  a  fine  was 
imposed  upon  a  foreign  corporation,  and  a  permit 
to  such  corporation  to  do  business  was  revoked  for 
joining  in  a  combination  made  outside  of  the  state 
in  restraint  of  trade. 

Finally,  the  Supreme  Court  has  upheld  most,  if 
not  all,  the  methods  which  have  been  provided  by 
the  states  for  enforcing  such  laws.  Criminal  penal¬ 
ties,  forfeiture  of  the  right  to  do  business,  decrees 
dissolving  illegal  associations,  have  been  all  upheld,2 
while  in  one  of  the  most  recent  cases  decided  3  it 
was  held  that  different  methods  may  be  provided  for 
corporations  on  the  one  hand  and  natural  persons 
on  the  other. 

Almost  the  only  thing  which  a  state  may  not  do 
in  the  case  of  a  combination  made  illegal  under  the 
law  is  to  impose  an  unreasonably  large  fine.  This 
would  probably  be  the  taking  of  property  without 
due  process  of  law.4 

It  may  therefore  be  said  that  apart  from  some 
provisions  in  the  state  constitutions  which  either  are 
peculiar  in  character  or  are  interpreted  peculiarly  by 

1  212  U.  S.  322. 

2  Hammond  Packing  Company?;.  Arkansas,  212  U.  S.  322; 
American  Cotton  Oil  Company  v.  Texas,  197  U.  S.  115  ;  Smiley  v. 
Kansas,  196  U.S.  447;  Grenada  Lumber  Company  v.  Mississippi, 
217  U.  S.  433. 

3  Standard  Oil  Company  v.  Tennessee,  217  U.  S.  413. 

4  See  Ex  parte  Young,  209  U.  S.  123;  but  see  Waters-Pierce  Oil 
Co.  v.  Texas,  212  U.  S.  86,  where  a  fine  of  over  a  million  dollars  was 
upheld  as  proper. 

u 


290  SOCIAL  REFORM  AND  THE  CONSTITUTION 


particular  state  courts,  there  are  no  limitations  of 
any  importance  upon  the  power  of  either  the  states 
or  the  United  States  to  prohibit  combinations  deemed 
to  be  in  restraint  of  commerce,  provided  the  regula¬ 
tions  adopted  are  uniform  and  affect  only  that  com¬ 
merce  which  by  the  terms  of  the  United  States  con¬ 
stitution  is  subject  to  regulation  by  the  authority 
taking  action. 

It  may  be  added,  also,  that  the  recent  decisions  of 
the  Supreme  Court  would  seem  to  evidence  a  dis¬ 
position  on  the  part  of  that  body  to  extend  the  field 
of  regulation  open  to  Congress  so  as  to  include  matters 
heretofore  regarded  as  within  the  jurisdiction  of 
states  where  their  regulation  appeared  to  be  necessary 
to  the  effective  regulation  of  what  was  unquestionably 
interstate  or  foreign  commerce. 

It  is  a  difficult  matter  to  derive  any  general  prin¬ 
ciples  from  the  decisions  of  the  courts  as  to  the  con¬ 
stitutionality  of  government  regulation,  since  so  much 
depends  upon  the  reasonableness  of  the  regulation 
at  issue.  It  may,  however,  be  said,  perhaps,  that  the 
widest  powers  of  regulation  in  the  interest  of  change 
in  social  conditions  are  to  be  found  in  the  taxing 
power  which  has  been,  and  may  be,  used  by  the  com¬ 
petent  government  in  our  political  system  to  pro¬ 
duce  desired  social,  rather  than  fiscal,  results.  It 
may  also  be  said  that  where  there  is  clearly  a  connec¬ 
tion  between  social  legislation  and  the  public  health 
or  safety,  the  courts  exhibit  considerable  unwilling¬ 
ness  to  declare  such  legislation  unconstitutional, 
but  that  where  this  connection  is  not  clearly  evident, 
or  where  the  purpose  of  the  legislation  is  not  so  much 
to  protect  the  public  health  and  safety  as  to  better 


GOVERNMENT  REGULATION 


291 


the  economic  condition  of  the  laboring  classes  and 
to  place  them  in  a  stronger  position  in  their  struggle 
with  their  employers,  the  tendency  of  the  judicial 
mind  is  to  consider  such  legislation  as  either  class 
legislation  or  as  infringing  upon  the  rights  of  property 
or  liberty  which  are  conceived  in  terms  of  laisser  faire. 

Finally,  it  may  be  said  that  the  courts  seem  in  some, 
but  not  in  all,  instances  to  be  willing  to  apply  to 
modern  conditions  theories  developed  in  the  English 
law  before  the  acceptance  of  laisser  faire  ideas  — 
theories  through  whose  application  vast  powers  of  reg¬ 
ulation  over  property  affected  with  a  public  interest 
and  over  attempts  at  monopoly  and  in  restraint  of 
trade  are  recognized  as  still  possessed  by  either  of  the 
governments  recognized  in  our  constitution  as  compe¬ 
tent  to  act. 

It  may  therefore  be  hoped,  if  not  expected,  that  as 
they  come  to  have  a  clearer  idea  of  the  difference  in 
present  from  former  economic  conditions,  the  courts 
may,  as  in  the  case  of  property  affected  with  a  public 
interest  and  of  monopolies,  come  to  the  conclusion  that 
the  powers  of  the  state  may  constitutionally  be  used 
to  protect  the  weaker  classes  in  the  community  from 
the  dangers  not  merely  of  disease  and  unsafe  condi¬ 
tions  of  labor,  but  as  well  from  those  which  are  atten¬ 
dant  upon  great  economic  dependence  in  an  increas¬ 
ingly  industrial  society.  It  may  be  pointed  out  that 
in  reaching  such  a  conclusion  they  would  not  be  de¬ 
parting  greatly  from  the  old  English  law,  which  offers 
examples,  as  in  the  case  of  the  law  of  usury,  of  a  de¬ 
sire  to  protect  those  members  of  society  who  were  at 
an  economic  disadvantage  in  the  struggle  for  existence. 


CHAPTER  VII 


THE  CONSTITUTIONALITY  OF  GOVERNMENT  AID 

I.  Proper  Purposes  of  Taxation 

The  question  of  the  constitutionality  of  govern¬ 
ment  aid  to  the  needy  classes  in  the  community  may 
arise  because  of  the  existence  of  the  rule  which  forbids 
the  exercise  of  the  powers  of  taxation  and  eminent 
domain  for  any  but  a  public  purpose. 

The  general  principle  that  the  purpose  for  which 
taxes  may  be  levied  and  property  may  be  taken 
must  be  public  is  perfectly  clear,  but  the  principle 
is  to  be  applied  in  the  light  of  our  history.  For  a 
long  time  prior  to  the  adoption  of  the  principle,  both 
these  powers  had  been  used  for  purposes  which  could 
be  considered  as  public,  only  if  regard  were  had  to 
the  indirect  advantages  which  the  public  secured  from 
their  exercise.  Thus  from  a  very  early  time  in  the 
history  of  both  England  and  this  country  the  taxing 
power  had  been  used  to  provide  funds  for  the  support 
of  the  poor,  while  private  persons  under  legislative 
authorization  had  been  permitted  to  make  use  of  water 
courses  for  the  development  of  water  power,  which 
was  to  be  used  by  them  for  purposes  of  private  profit. 
These  poor  laws  and  these  mill  acts,  as  they  were 
called,  have  been  regarded  as  constitutional,  notwith¬ 
standing  the  general  rule  of  constitutional  law  to 
which  allusion  has  been  made. 

292 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  293 


As  new  conditions  have  appeared  to  make  necessary 
attempts  on  the  part  of  the  legislature  to  accord  aid 
to  various  classes  of  individuals  in  the  community, 
the  courts  have  been  called  upon  to  determine  whether 
such  attempts  are  forbidden  by  the  principle  requiring 
that  the  purpose  of  the  legislature  shall  have  been 
public,  or  whether  they  fairly  come  under  some  of 
the  exceptions  to  the  rule  which  have  been  shown 
always  to  have  existed. 

The  validity  of  such  attempts  is  to  be  determined 
in  the  first  place  by  a  consideration  of  the  purpose 
and  effect  of  the  fourteenth  amendment.  There  was 
nothing  in  the  original  constitution  of  the  United  States 
or  in  the  original  amendments  thereto  which  could 
be  regarded  as  limiting  the  taxing  power  of  the  states 
to  public  purposes.  In  Loan  Association  v.  Topeka 1 
it  is  true  the  Supreme  Court  affirmed  a  decision  of 
the  circuit  court,  which  had  obtained  jurisdiction 
through  diversity  of  citizenship,  holding  invalid  cer¬ 
tain  bonds  issued  by  a  municipal  corporation  in  aid 
of  a  private  manufacturing  enterprise.  The  grounds 
for  the  decision  were  that  there  are,  as  Mr.  Justice 
Miller  expressed  it,  certain  — 

“rights  in  every  free  government  beyond  the  control  of  the 
state.  A  government  which  recognized  no  such  rights,  which 
held  the  lives,  the  liberty,  and  the  property  of  its  citizens  sub¬ 
ject  at  all  times  to  the  absolute  disposition  and  unlimited  control 
of  even  the  most  democratic  depository  of  power,  is  after  all  a 
despotism.  ...  To  lay  with  one  hand  the  power  of  the  govern¬ 
ment  on  the  property  of  the  citizen  and  with  the  other  to  bestow 
it  upon  favored  individuals  to  aid  private  enterprises  and  build 
up  private  fortunes  is  none  the  less  a  robbery,  because  it  is  done 
under  the  forms  of  law  and  called  taxation.  ...  We  have  es- 

1  20  Wall.  655. 


294  SOCIAL  REFORM  AND  THE  CONSTITUTION 


tablished,  we  think  beyond  cavil,  that  there  can  be  no  lawful  tax 
which  is  not  levied  for  a  public  purpose.” 

This  was  said  as  to  the  meaning  to  be  given  to  the 
constitution  of  the  state  of  Kansas  which  the  court 
was  called  upon  to  apply  in  the  absence  of  decisions 
by  the  state  courts  interpreting  it.1 

Mr.  Justice  Clifford  dissented  from  the  conclusions 
of  the  court  on  the  ground  that :  — 

“  Courts  cannot  nullify  an  act  of  the  state  legislature  on  the 
vague  ground  that  they  think  it  opposed  to  a  general  latent  spirit 
supposed  to  pervade  or  underlie  the  constitution,  where  neither 
the  terms  nor  the  implications  of  the  instrument  disclose  any 
such  restriction.  Such  a  power  is  denied  to  the  courts,  because 
to  concede  it  would  be  to  make  the  courts  sovereign  over  both 
the  constitution  and  the  people  and  convert  the  government  into 
a  judicial  despotism.” 

The  views  of  Mr.  Justice  Clifford  are  approved  in 
Fallbrook  Irrigation  District  v.  Bradley,2  where  it 
is  said  that,  if  an  act  of  a  state  legislature  does  not 
violate  some  provision  of  the  federal  constitution, 
‘There  is  no  justification  for  the  federal  courts  to  run 
counter  to  the  decisions  of  the  highest  state  courts  upon 
questions  involving  the  construction  of  state  statutes 
or  constitutions,  on  any  alleged  ground  that  such 
decisions  are  in  conflict  with  sound  principles  of  gen¬ 
eral  constitutional  law.”  The  court,  after  making 
this  statement,  proceeds  to  decide  the  case  before 
it  on  the  theory  that  state  taxation  for  a  private  pur¬ 
pose  would  be  forbidden  by  the  fourteenth  amendment. 

It  may  therefore  be  said  that  the  employment  by 
the  state  of  the  power  of  taxation  for  a  private  pur- 

1  See  Fallbrook  Irrigation  District  v.  Bradley,  164  U.  S.  1 12-155. 

2 164  U.  S.  112. 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  295 


pose  is  unconstitutional  from  the  point  of  view  of 
the  United  States  constitution. 

What  now  is  the  distinction  made  by  the  United 
States  Supreme  Court  between  a  public  purpose  taxa¬ 
tion  for  which  is  proper  and  a  private  purpose  taxation 
for  which  is  improper  ?  In  its  decision  of  this  question 
the  Supreme  Court  has  never  overruled  the  decision 
of  a  state  court  that  a  given  purpose,  for  which  state 
taxes  had  been  levied,  was  public  in  character.1  In¬ 
deed,  in  Fallbrook  Irrigation  District  v.  Bradley 2 
the  court,  while  denying  that  the  determinations  of 
state  courts  are  conclusive  “upon  the  question  as  to 
what  is  due  process  of  law,  and  as  incident  thereto, 
what  is  a  public  use,”  observed : 1  — 

“It  is  obvious,  however,  that  what  is  a  public  use  frequently 
and  largely  depends  upon  the  facts  and  circumstances  surround¬ 
ing  the  particular  subject  matter  in  regard  to  which  the  charac¬ 
ter  of  the  use  is  questioned.”  In  this  case  the  court  held,  for 
example,  that  irrigation  was  a  public  use  in  arid  districts,  and 
said :  “The  people  of  California  and  the  members  of  her  legisla¬ 
ture  must  in  the  nature  of  things  be  more  familiar  with  the  facts 
and  circumstances  than  can  any  one  who  is  a  stranger  to  her  soil. 
This  knowledge  and  familiarity  must  have  their  due  weight  with 
the  state  courts  which  are  to  pass  upon  the  question  of  public 
use  in  the  light  of  the  facts  which  surround  the  subject  in  their 
own  state.  For  these  reasons,  while  not  regarding  the  matter  as 
concluded  by  these  various  declarations  and  acts  and  decisions 
of  the  people  and  legislature  and  courts  of  California,  we  yet,  in 
the  consideration  of  the  subject,  accord  to  and  treat  them  with 
very  great  respect,  and  we  regard  the  decisions  as  embodying  the 

1  In  Olcott  v.  Supervisors,  16  Wall.  689,  the  Supreme  Court  did, 
indeed,  claim  that  it  was  not  bound  by  the  decisions  of  the  state  courts 
as  to  what  is  a  public  purpose  for  which  taxes  may  be  levied,  and  was 
of  the  opinion  that  a  purpose  was  public  which  had  been  declared  to 
be  private  by  the  state  court.  The  case  would  appear,  however, 
to  have  been  decided  on  other  grounds.  2  164  U.  S.  112. 


296  SOCIAL  REFORM  AND  THE  CONSTITUTION 


deliberate  judgment  and  matured  thought  of  the  courts  of  that 
state  on  this  question.” 

The  same  position  is  taken  by  the  court  in  Welch  v. 
Swazey  1  where  it  is  said  that  the  court  — 

“feels  the  greatest  reluctance  in  interfering  with  the  well- 
considered  judgments  of  the  courts  of  a  state  whose  people  are 
to  be  affected  by  the  operation  of  a  law.  The  highest  court  of 
the  state  in  which  statutes  of  the  kind  under  consideration  [viz. 
statutes  regulating  the  height  of  buildings  in  cities]  are  passed 
is  more  familiar  with  the  particular  causes  which  led  to  their 
passage  (although  they  may  be  of  a  public  nature)  and  with  the 
general  situation  surrounding  the  subject  matter  of  the  legisla¬ 
tion  than  this  court  can  possibly  be.  We  do  not,  of  course,  in¬ 
tend  to  say  that  under  such  circumstances  the  judgment  of  the 
state  court  upon  the  question  will  be  regarded  as  conclusive, 
but  simply  that  it  is  entitled  to  the  very  greatest  respect,  and 
will  only  be  interfered  with,  in  cases  of  this  kind,  where  the  de¬ 
cision  is,  in  our  judgment,  plainly  wrong.” 2 

While  the  California  case  recognized  differences  due 
to  climate  and  geographical  conditions,  this  case  from 
Massachusetts  recognized  that  the  same  influence 
was  to  be  accorded  to  social  conditions.  For  what  has 
been  quoted  was  said  with  regard  to  a  law  passed  to 
remedy  through  limitations  imposed  upon  the  height 
of  buildings,  the  evils  resulting  from  the  uncontrolled 
use  of  land,  in  urban  conditions  such  as  exist  in  a  great 
city  like  Boston. 

Whether  the  court  will  carry  this  idea  of  the  local 
autonomy  of  the  states  in  deciding  what  should  be  the 
remedies  to  be  applied  to  the  evils  attendant  upon  an 
intense  industrial  life  under  conditions  of  freedom  of 

1  214  U.  S.  91. 

2  See  also  Wurts  v.  Hoagland,  114  U.  S.  606,  applying  the  same 
principle  to  the  draining  of  swampy  lands  for  which,  even  though  the 
lands  are  in  private  hands,  the  power  of  taxation  may  be  used. 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  297 


individual  action,  of  course  cannot  be  said,  but  the 
logic  of  the  argument  cannot  be  avoided  if  the  court 
can  be  brought  to  see  that  the  differences  in  conditions 
due  to  the  varied  occupations  of  the  people  in  different 
parts  of  the  country  are  in  reality  just  as  great  as  the 
differences  in  climate  and  social  conditions  which  were 
recognized  in  the  opinions  from  which  quotations  have 
been  given. 1 

It  may  therefore  be  concluded  both  from  these 
opinions  and  from  the  absence  of  decisions  overruling 
the  determinations  of  state  courts  on  the  subject  that 
each  of  the  states  has  quite  a  large  freedom  of  action 
in  determining,  in  the  circumstances  and  conditions 
existing  within  it,  what  purposes  are  public  from  the 
viewpoint  of  its  power  of  taxation. 

We  are  thus  brought  to  a  consideration,  in  the  second 
place,  of  the  decisions  of  the  state  courts  as  to  what  are 
public  purposes  for  which  the  power  of  taxation  may 
be  exercised. 

The  state  courts  have  been  influenced  in  their  deter¬ 
mination  of  this  question  by  the  fact  that  the  under¬ 
taking  which  was  being  aided  by  the  exercise  of  the 
power  of  taxation  was  or  was  not  in  the  control  and 
management  of  private  corporations  or  individuals. 
Where  the  control  and  management  are  private,  they 
are  more  apt  to  regard  the  purpose  as  private  than 
where  such  control  is  in  the  hands  of  the  state  or  local 
authorities.  Thus  the  Supreme  Court  of  Ohio  has 

1  See  also  Missouri  v.  Lewis,  101  U.  S.  22,  for  a  recognition  of  the 
principle  that  varying  conditions  of  population  may  under  the  four¬ 
teenth  amendment  be  subjected  to  different  treatment  by  the  states. 
See  also  Noble  State  Bank  v.  Haskell,  31  S.  C.  R.  186,  upholding  an 
assessment  on  banks  to  provide  a  bank  depositors’  guaranty  fund. 
Infra ,  p.  324. 


298  SOCIAL  REFORM  AND  THE  CONSTITUTION 


held  that  even  under  a  constitution  recognizing  a  duty 
upon  the  part  of  the  state  to  support  the  indigent  blind 
in  public  institutions  it  is  improper  for  the  legislature 
to  grant  out  of  public  funds  an  allowance  to  an  indigent 
blind  person  not  supported  in  a  public  institution.1 

When  it  is  said  that  the  courts  are  influenced  by 
the  fact  that  the  undertaking  is  under  private  control, 
it  is  not  meant  to  indicate  that  the  character  of  the 
control  is  decisive.  For  it  has  frequently  been  held 
that  where  the  character  of  the  purpose  is  unquestion¬ 
ably  public,  the  character  of  the  control  is  immaterial. 
Thus  the  use  of  the  taxing  power  to  aid  railway  cor¬ 
porations  has  almost  universally  been  upheld  as 
constitutional.2  It  is  usually  where  the  character 
of  the  purpose  is  doubtful  that  the  character  of  the 
control  affects  the  decision. 

In  what  now  does  doubt  as  to  the  character  of  the 
purpose  consist  ?  In  answering  this  question  we  have, 
as  has  been  intimated,  to  resort  to  history,  which  has 
such  a  potent  influence  on  the  decision  of  constitutional 
cases.  Nowhere,  perhaps,  is  the  historical  argument 
more  forcibly  expressed  than  in  Loan  Association  v. 
Topeka,3  where  the  court  says :  — 

“In  deciding  whether,  in  the  given  case,  the  object  for  which 
the  taxes  are  assessed  falls  upon  one  side  or  the  other  of  this  line, 
they  [the  courts]  must  be  governed  mainly  by  the  course  and 
usage  of  the  government,  the  objects  for  which  taxes  have  been 

1  Lucas  Co.  v.  State,  75  Ohio  St.  114.  See  also  Wisconsin  Keely 
Inst.  Co.  v.  Milwaukee  Co.,  95  Wis.  153  where  a  payment  to  a  private 
corporation  for  the  cure  of  an  indigent  drunkard  was  declared  to  be 
improper.  But  see  Mayor  v.  Keely  Inst.,  81  Md.  106;  In  re  House, 
46  Pac.  (Col.)  1 1 7 ;  and  White  v.  Inebriates’  Home,  141  N.  Y.  123. 

2  See  e.g.  Olcott  v.  Supervisors,  16  Wall.  689. 

3  20  Wall.  655. 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  299 


customarily  and  by  a  long  course  of  legislation  levied,  what  ob¬ 
jects  or  purposes  have  been  considered  necessary  to  the  support 
and  for  the  proper  use  of  the  government  whether  state  or  mu¬ 
nicipal.  Whatever  lawfully  pertains  to  this  and  is  sanctioned  by 
time  and  the  acquiescence  of  the  people,  may  well  be  held  to  be¬ 
long  to  the  public  use,  and  proper  for  the  maintenance  of  good 
government,  though  this  may  not  be  the  only  criterion  of  right¬ 
ful  taxation.” 

It  follows,  therefore,  that  the  objects  for  which  taxes 
have  been  levied  in  the  past  are  public  purposes  from 
this  point  of  view.  Thus  roads,  schools,  highways, 
and  the  protection  of  the  peace,  of  the  public  health 
and  safety,  are  all  public  purposes  for  which  taxes  may 
be  levied.  It  is  for  this  reason  that  taxes  may  be 
levied  to  aid  the  state  or  municipalities  in  providing 
for  the  public  ownership  and  operation  of  what  we 
call  public  utilities.  For  the  question  involved  is 
not  the  character  of  the  control,  the  constitutionality 
of  which  is  to  be  determined  from  a  consideration 
of  other  constitutional  principles  than  that  requiring 
the  purpose  of  taxation  to  be  public.  What  is  here 
to  be  considered  is  the  purpose  for  which  the  tax  is 
levied  which  in  the  case  of  a  municipally  owned  and 
operated  street  railway,  e.g.,  is  the  provision  of  public 
means  of  communication. 

It  is  only  when  we  come  to  the  new  functions,  the 
discharge  of  which  changed  economic  and  social  con¬ 
ditions  make  it  seem  necessary  for  the  state  in  either 
its  central  or  local  organizations  to  assume,  that  we 
meet  with  difficulty.  What  criterion  are  we  to  adopt 
when  we  come  to  consider  such  subjects  as  old  age, 
accident,  and  sickness  insurance  or  pensions,  which 
in  some  form  would  appear  to  be  essential  parts  of 


300  SOCIAL  REFORM  AND  THE  CONSTITUTION 

the  program  of  social  reform  in  Germany,  England, 
and  Australasia  ? 

% 

II.  Pensions  in  Case  of  Old  Age,  Accident,  or 

Sickness 

As  no  attempt  has  been  as  yet  made  in  this  country 
to  establish  old  age,  sickness,  and  accident  pensions, 
we  have  no  decisions  directly  in  point.  We  have, 
it  is  true,  a  few  decisions  on  the  subject  of  pensions 
to  government  employees.  But  they  cannot  be 
regarded  when  favorable  as  having  any  particular 
force,  since  such  pensions  are  regarded  rather  as  a 
part  of  the  compensation  attached  to  government 
employment  than  as  gratuities.1  Indeed,  we  have 
a  few  decisions  which  hold  such  pensions  to  be  im¬ 
proper  where  they  are  awarded  to  persons  who  have 
already  been  retired  from  the  public  service,2  or  who, 
while  in  the  public  service,  are  not  induced  to 
continue  in  service  as  a  result  of  their  award.3  On 
the  other  hand,  the  cases  holding  service  pensions  of  this 
character  to  be  unconstitutional  cannot  be  regarded 
as  deciding  that  old-age  pensions,  e.g.,  are  improper 
where  such  pensions  are  confined  to  the  indigent, 
since  no  attempt  has  been  made  in  providing  for 
service  pensions  to  confine  them  to  those  who  are  in 
pecuniary  need. 

In  endeavoring  to  answer  the  question  as  to  the 
constitutionality  of  old  age,  accident,  and  sickness 
pensions,  we  must  study  the  cases  which  have  been 

1  See  e.g.  Commonwealth  v.  Walton,  182  Pa.  St.  373. 

2  See  e.g.  In  the  Matter  of  Mahon,  171  N.  Y.  263. 

3  See  State  v.  Ziegenheim,  144  Mo.  283. 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  301 

decided  as  to  doubtful  purposes  of  taxation,  —  i.e. 
doubtful  from  the  point  of  view  of  their  being  public 
or  private,  —  and  then  try  to  reason  by  analogy  from 
them  to  the  question  in  hand.  A  study  of  the  cases 
which  have  held  purposes  to  be  private  and  therefore 
to  be  improper  purposes  of  taxation,  can  hardly  fail 
to  force  the  conclusion  that  any  purpose  is  an  improper 
purpose  for  taxation  which  consists  in  the  grant  of 
public  monies  to  individuals  who  are  not  in  the  service 
of  the  government  or  who  cannot  be  regarded,  because 
of  their  poverty,  as  fit  subjects  of  public  charity.  An 
old  age,  accident,  or  sickness  pension  which  is  not 
conditioned  upon  poverty  would  probably  be  regarded 
by  the  courts  as  unconstitutional  where  the  funds 
from  which  it  was  paid  were  derived  from  taxation. 

Nor  would  the  benefits  to  the  general  social  system 
which  might  conceivably  be  derived  from  such  a 
pension  have  very  great  effect  upon  the  attitude  of 
the  courts.  Even  if  these  advantages  were  conceded, 
the  pensions  would  still  be  declared  unconstitutional 
unless  former  decisions  were  overruled.  For,  very 
generally,  the  advantages  derived  by  the  public  from 
the  expenditure  of  public  money  do  not  make  public 
the  purpose  of  the  taxes  from  which  such  money  is 
obtained.  In  Lowell  v.  Boston  1  an  act  of  the  Mas¬ 
sachusetts  legislature  which  was  passed  soon  after 
the  Boston  fire  was  under  consideration.  This  act 
provided  for  an  issue  of  city  bonds  to  be  ultimately 
paid  for  out  of  taxes,  the  proceeds  of  which  bonds 
were  to  be  loaned  to  individuals  in  order  to  enable 
them  to  rebuild  in  the  burnt  districts.  The  act  was 
declared  to  be  unconstitutional  as  providing  for  the 

1  hi  Mass.  454. 


302  SOCIAL  REFORM  AND  THE  CONSTITUTION 


exercise  of  the  power  to  tax  for  a  private  purpose. 
In  the  course  of  the  opinion  the  court  said :  — 

“Resulting  advantage  to  the  public  does  not  of  itself  give  to 
the  means  by  which  it  is  produced  the  character  of  a  public 
use.  .  .  .  There  is  no  public  use  or  public  service  declared  in 
the  statute  now  under  consideration,  and  we  are  of  opinion  that 
none  can  be  found  in  the  purposes  of  its  provisions.  .  .  .  The 
fund  raised  is  intended  to  be  appropriated  distributively,  by 
separate  loans  to  numerous  individuals,  each  one  of  which  will 
be  independent  of  any  relation  to  the  others,  or  to  any  general 
purpose,  except  that  of  aiding  individual  enterprise  in  matters 
of  private  business.  The  property  thus  created  will  remain 
exclusively  private  property  .  .  .  with  no  obligation  to  render 
any  service  or  duty  to  the  commonwealth  or  to  the  city  — 
except  to  repay  the  loan  —  or  to  the  community  at  large  or 
any  part  of  it.” 

The  court  goes  on  to  say  that  the  fact  that  the  city 
will  be  indirectly  benefited  through  increase  in  trade 
and  business  does  not  affect  the  judicial  aspect  of 
the  case  in  any  way.  This  case  has  never  been  over¬ 
ruled,  and  has  been  approved,  by  the  Supreme  Court 
of  the  United  States.1  There  is  also  a  series  of  cases 
of  which  Loan  Association  v.  Topeka  is  an  example, 
holding  that  the  issue  of  city  or  state  bonds  payable 
out  of  the  proceeds  of  taxation  to  aid  private  manu¬ 
facturing  corporations  is  improper  as  providing  tax¬ 
ation  for  a  private  purpose. 

Lowell  v.  Boston  and  Loan  Association  v.  Topeka 
were  decided  many  years  ago  (1873  and  1874,  respec¬ 
tively).  But  while  there  has  been  no  indication  of 

1  See  also  State  v.  Osawkee  Township,  14  Kan.  418,  which  declared 
the  grant  of  aid  to  poor  farmers  to  purchase  grain  for  seed  and  feed, 
in  districts  affected  by  drought,  was  not  a  public  purpose.  This  case 
was  decided  in  1875,  only  two  years  after  Lowell  v.  Boston.  Cf. 
William  Deering  Co.  v.  Peterson,  75  Minn.  118. 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  303 


an  attempt  to  reverse  them  as  to  the  particular  points 
of  the  law  which  they  decided,  they  have  not  been 
extended  in  their  operation.  There  are  also  a  number 
of  cases  further,  some  decided  by  the  Supreme  Court 
of  the  United  States,  which  have  extended  the  prin¬ 
ciple  of  the  Railway  Aid  Bond  cases  so  as  to  include 
mills  for  grinding  grain  which  are  open  to  all  comers 
at  a  fixed  toll,1  thus  recognizing  large  powers  of  social 
cooperation  in  local  communities,  as  well  as  one  case  in 
a  state  court  which  has  likewise  somewhat  extended  the 
conception  of  public  charity  so  as  in  districts  affected 
by  droughts  and  other  calamities  to  permit  the  use 
of  the  taxing  power  to  obtain  capital  for  the  purchase 
of  seed  corn  by  needy  farmers,  who,  while  not  at  the 
time  paupers,  were  in  great  danger  of  becoming  such 
did  they  not  receive  aid.2 

But  it  will  be  noticed  that  none  of  the  cases  upon 
this  subject  has  recognized  the  constitutionality  of 
acts  which  make  grants  of  public  moneys  derived  from 
taxation  to  persons  not  either  performing  a  public 
service  similar  to  that  performed  by  a  public  officer 
or  a  common  carrier,  or  not  assimilated  to  the  posi¬ 
tion  of  paupers.  In  State  v.  Osawkee  Township, 
in  which  the  opinion  was  given  by  Judge  Brewer, 
afterwards  a  member  of  the  United  States  Supreme 
Court,  the  constitutionality  of  the  act  was  denied 
because  the  recipients  of  the  aid  given  were  not 
actually  paupers. 

1  See  e.g.  Burlington  v.  Beasley,  14  U.  S.  310;  Blair  v.  Cumming 
Co.,  in  U.  S.  363.  These  cases  are  also  interesting  as  showing  how 
closely  the  Supreme  Court  follows  the  decisions  of  state  courts  as  to 
what  are  public  purposes  and  therefore  proper  purposes  for  taxation 
in  their  respective  states. 

2  North  Dakota  v.  Nelson  Co.,  1  N.  D.  88. 


304  SOCIAL  REFORM  AND  THE  CONSTITUTION 


The  only  case  which  shows  any  tendency  to  regard 
as  a  public  purpose  the  use  of  the  power  of  taxation, 
with  the  idea  of  preventing  pauperism,  is  the  North 
Dakota  case  where  it  is  said: 

“If  the  destitute  farmers  of  the  frontier  of  North  Dakota  were 
now  actually  in  the  almshouses  of  the  various  counties  in  which 
they  reside,  all  the  adjudications  of  the  courts,  state  or  federal, 
upon  this  subject,  could  be  marshaled  as  precedents  in  support 
of  any  taxation,  however  onerous,  which  might  become  neces¬ 
sary  for  their  support.  But  is  it  not  competent  for  the  legisla¬ 
ture  to  make  small  loans,  secured  by  prospective  crops,  to 
those  whose  condition  is  so  impoverished  and  desperate  as  to 
reasonably  justify  the  fear  that  unless  they  receive  help,  they  and 
their  families  will  become  a  charge  upon  the  counties  in  which 
they  live  ?  ” 

What  now  has  been  the  attitude  of  the  state  courts 
towards  the  granting  under  present  constitutional 
provisions  of  pensions  or  allowances  to  persons 
regarded  as  paupers  ?  In  answering  this  question, 
it  would  seem  to  be  necessary  to  bear  in  mind  the 
character  of  the  control  of  the  funds  granted.  If 
that  is  private,  the  tendency  of  the  courts  is,  as  has 
been  pointed  out,  to  regard  the  purpose  as  also  private. 
Courts  which  recognize  education  as  a  proper  purpose 
of  taxation  sometimes  consider  as  improper  the  grant 
of  public  moneys  to  educational  institutions  under 
private  control.1  It  is  true  that  this  question  of 
grants  of  money  to  private  schools  is  somewhat  com¬ 
plicated  by  the  fact  that  private  educational  institu¬ 
tions  which  desire  public  aid  are  usually  at  the  same 
time  sectarian  institutions,  and  on  that  account  for 
other  constitutional  reasons  not  proper  recipients 
of  public  charity.  But  there  are  cases  which  have 
1  Jenkins  v.  Andover,  103  Mass.  94. 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  305 


taken  the  same  view  with  regard  to  charitable  insti¬ 
tutions  under  private  control  which  have  been  estab¬ 
lished  with  the  idea  of  offering  aid  to  particular 
classes  of  indigent  persons.1  Opposed  to  them,  how¬ 
ever,  is  an  imposing  array  of  cases  which  refuse  to 
apply  in  charitable  matters  the  rule  that  the  private 
character  of  the  control  necessarily  makes  the  char¬ 
acter  of  the  purpose  private.2 

But  even  if  we  assume  that  the  better  rule  is  that 
public  moneys  may  constitutionally  be  granted  to 
private  corporations  established  for  charitable  pur¬ 
poses,  we  have  by  no  means  proved  that  public  moneys 
may  be  granted  to  indigent  individuals.  For  corpo¬ 
rations  under  such  conditions  are  regarded  as  acting 
as  agents  of  the  state  in  discharging  the  public  func¬ 
tion  of  supporting  the  poor.  They  do  not  receive 
the  funds  granted  them  for  their  own  benefit. 

In  order  to  uphold  from  a  constitutional  point  of 
view  the  grant  of  pensions  to  individuals,  we  may 
attempt  to  show  that  such  pensions  are  justified  by 
the  historical  argument,  as  being  a  form  of  poor  relief, 
and  are  not  to  be  regarded  as  improper  by  the  logic 
of  the  decisions  rendered  with  regard  to  the  propriety 
of  particular  attempts  to  provide  poor  relief. 

May  old  age,  accident,  and  sickness  pensions  granted 
to  indigent  persons  properly  be  regarded  as  a  form 
of  outdoor  relief  ?  The  cases  on  the  subject  of  relief 
to  paupers  are  legion,  but  the  question  as  to  the  con- 


1  Such  are  the  Keely  Cure  cases  decided  in  Wisconsin,  e.g.  Wis¬ 
consin  Keely  Inst.  Co.  v.  Milwaukee  Co.,  95  Wis.  153. 

2  Mayor  v.  Keely  Inst.,  81  Md.  106;  In  re  House,  46  Pac.  (Col.) 
1 17;  White  v.  Inebriates  Home,  141  N.  Y.  123;  Shepherd’s  Fold  v. 
New  York,  96  N.  Y.  137. 


x 


306  social  reform  and  the  constitution 


stitutionality  of  the  numerous  statutes  providing 
for  the  grant  of  outdoor  relief  and  regulating  the 
respective  relations  of  the  persons  receiving  it,  order¬ 
ing  it,  and  dispensing  it  has  apparently  not  been  raised. 
Such  statutes  are  assumed  to  be  constitutional,  and 
the  decisions  have  concerned  themselves  with  deter¬ 
mining  the  reciprocal  rights  and  duties  of  individuals 
under  the  statutes. 

On  general  principles  we  can  therefore  assume  that 
such  pensions,  if  granted  to  indigent  persons  under 
the  limitations  set  forth,  would  be  constitutional  as 
a  form  of  outdoor  poor  relief,  unless  the  courts  are 
of  the  opinion  that  the  historical  argument  is  inappli¬ 
cable  and  that  such  pensions  are  evidence  of  an  attempt 
to  adopt  for  our  free,  independent,  and  self-supporting 
American  population  a  new  and  unprecedented  form 
of  relief  originating  outside  of  England  or  the  United 
States  and,  e.g .,  in  one  of  the  paternalistic  governments 
of  Europe  ? 

It  must  be  admitted  that  certain  remarks  made 
in  the  course  of  deciding  one  or  two  concrete  cases 
tend  to  force  the  conclusion  that  all  the  state  courts, 
at  any  rate,  are  not  as  yet  prepared  to  regard  pensions 
even  to  indigent  individuals  as  constitutionally  proper 
in  this  land  of  individual  freedom  and  private  initia¬ 
tive.  These  cases  are  Lucas  County  v.  State1  and 
State  v.  Switzler.2  In  the  former  the  legislature 
provided  for  granting  to  all  adult  blind  persons  “who 
have  been  residents  of  the  state  for  five  years  and  of 
the  county  one  year,  and  have  no  property  or  means 
with  which  to  support  themselves”  allowances  not 
to  exceed  twenty-five  dollars  quarterly.  The  court 
1  75  Ohio  State,  114.  2  143  Mo.  287. 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  307 


declared  the  act  to  be  unconstitutional  largely  on  the 
ground  that  it  provided  for  the  expenditure  of  public 
funds  for  a  private  purpose  and  closed  its  argument 
by  saying :  — 

“If  the  power  of  the  legislature  to  confer  an  annuity  upon  any 
class  of  needy  citizens  is  admitted  upon  the  ground  that  its  tend¬ 
ency  will  be  to  prevent  them  from  becoming  a  public  charge, 
innumerable  classes  may  clamor  for  similar  bounties,  and  if 
not  upon  equally  meritorious  ground,  still  on  ground  that  is 
valid  in  point  of  law,  and  it  is  doubted  that  any  line  could  be 
drawn  short  of  an  equal  distribution  of  property.” 

The  court  was  influenced  in  a  negative  way  by 
the  historical  argument  already  touched  upon.  After 
quoting  the  formulation  of  it  by  Mr.  Justice  Miller 
in  Loan  Association  v.  Topeka,  it  remarked,  “If 
that  rule  is  applied  here,  it  must  be  said  that  the  act 
under  consideration  is  without  precedent  in  this 
state.” 

In  the  Missouri  case  the  legislature  passed  an  act 
providing  for  the  levy  of  a  progressive  inheritance  tax, 
which  was  regarded  by  the  court  as  unconstitutional 
both  because  of  its  progressive  character,  and  because 
of  the  purpose  for  which  it  was  levied,  viz.  to  pro¬ 
vide  fellowships  in  the  State  University  for  students 
dependent  upon  their  own  exertions  for  their  edu¬ 
cation  and  “financially  unable  otherwise  to  obtain 
the  same”  In  the  course  of  the  opinion  the  court 
took  occasion  to  say  that :  — 

“  Paternalism,  whether  state  or  federal  as  the  derivation  of  the 
term  implies,  is  an  assumption  by  the  government  of  a  quasi- 
fatherly  relation  to  the  citizen  and  his  family,  involving  excessive 
governmental  regulation  of  the  private  affairs  and  business 
methods  and  interests  of  the  people,  upon  the  theory  that  the 
people  are  incapable  of  managing  their  own  affairs,  and  is  perni- 


308  social  reform  and  the  constitution 


cious  in  its  tendencies.  In  a  word,  it  minimizes  the  citizen  and 
maximizes  the  government.  Our  federal  and  state  governments 
are  founded  upon  a  principle  wholly  antagonistic  to  such  a  doc¬ 
trine.  Our  fathers  believed  the  people  of  these  free  and  inde¬ 
pendent  states  were  capable  of  self-government;  a  system  in 
which  the  people  are  the  sovereigns  and  the  government  their 
creatures  to  carry  out  their  commands.  Such  a  government  is 
founded  on  the  willingness  and  right  of  the  people  to  take  care 
of  their  own  affairs  and  an  indisposition  to  look  to  the  govern¬ 
ment  for  everything.  The  citizen  is  the  unit.  It  is  his  province 
to  support  the  government  and  not  the  government’s  to  support 
him.  Under  self-government  we  have  advanced  in  all  the  ele¬ 
ments  of  a  great  people  more  rapidly  than  any  nation  that  has 
ever  existed  upon  the  earth,  and  there  is  greater  need  now  than 
ever  before  in  our  history  of  adhering  to  it.  Paternalism 
is  a  plant  which  should  receive  no  nourishment  upon  the  soil  of 
Missouri.” 

It  is  to  be  noticed  that  the  historical  argument 
which  is  in  large  degree  the  controlling  argument  in 
these  cases,  when  taken  together  with  the  insistence 
upon  that  political  and  economic  theory  known  as 
laisser  faire ,  to  which  is  accorded  an  absolute  and 
universal  application  at  all  times  and  under  all  cir¬ 
cumstances,  both  makes  social  reform  impossible,  so 
far  as  its  concrete  measures  cannot  be  justified  by 
our  own  history,  and  regards  political  and  economic 
conditions  as  static  rather  than  progressive  in  char¬ 
acter.  The  result  of  its  universal  application  will 
be  to  fix  upon  the  country  for  all  time  institutions, 
which,  as  has  been  pointed  out,  were  established  in 
the  eighteenth  century  to  deal  with  conditions  then 
existing,  but  which  may  in  this  the  twentieth  century 
be  unsuitable  because  of  the  economic,  social,  and 
political  changes  which  have  taken  place  in  the  last 
hundred  years. 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  309 

The  emphasis  given  to  this  historical  argument, 
furthermore,  is  not  justified  by  the  attitude  of  the 
Supreme  Court  of  the  United  States.  For  Mr. 
Justice  Miller  after  formulating  the  argument  in  his 
opinion  in  Loan  Association  v.  Topeka  was  careful 
to  indicate  his  feeling  that  it  was  not  controlling  by 
saying:  “Though  this  may  not  be  the  only  criterion 
of  rightful  taxation,”  while  the  court  in  its  more  recent 
decisions  on  what  is  due  processs  of  law  under  the 
fourteenth  amendment  has  shown  very  clearly  that 
in  its  opinion  the  decision  of  the  question  is  to  be 
influenced  by  the  geographical  and  social  conditions 
attendant  upon  the  particular  case  in  which  the  ques¬ 
tion  is  raised. 

Such  an  application  of  the  historical  argument,  will, 
where  the  constitution  is  not  easily  susceptible  of 
amendment,  preclude  the  possibility  of  orderly  and 
legal  change  in  our  conception  of  the  powers  of  govern¬ 
ment,  made  necessary  by  changes  in  economic  and 
social  conditions,  and  may  conceivably  make  unavoid¬ 
able  resort  to  revolutionary  methods  of  change. 

It  may  then  be  said  that  cm  til  the  state  constitutions 
have  been  changed  and  the  state  courts  have  decided 
that  such  changes  are  from  the  viewpoint  of  the  federal 
constitution  proper,  there  is  no  great  likelihood  that 
a  system  of  state  pensions  in  the  case  of  old  age, 
sickness,  or  accident  which  is  based  even  on  the  indi¬ 
gence  of  the  recipients  of  such  pensions  would  be 
regarded  as  constitutional.  Whether,  where  provi¬ 
sions  have  been  inserted  into  the  state  constitutions 
making  such  pensions  clearly  constitutional,  and  the 
approval  by  the  state  courts  of  their  propriety  from 
the  viewpoint  of  the  federal  constitution  has  been 


310  SOCIAL  REFORM  AND  THE  CONSTITUTION 


secured,  the  United  States  Supreme  Court  will  be 
guided  by  the  decisions  of  the  state  courts,  is  a  ques¬ 
tion  about  which  we  may  indulge  in  an  almost  indefi¬ 
nite  amount  of  speculation,  but  as  to  which  a  certain 
answer  cannot  be  given.  It  is  well,  however,  to  re¬ 
member  that  the  Supreme  Court  has  several  times 
held  that  the  due  process  of  law  and  the  equal  pro¬ 
tection  of  the  laws  required  by  the  fourteenth  amend¬ 
ment  are  not  the  same  thing  in  all  parts  of  the  coun¬ 
try.  That  body  has  already  recognized  that  certain 
climatic  and  population  conditions  have  the  effect  of 
making  state  laws  constitutional  which  under  different 
conditions  might  be  regarded  as  improper.  It  does 
not  seem  a  long  step  from  this  position  to  the  further 
position  that  industrial,  i.e.  economic,  rather  than 
climatic  and  social  conditions,  shall  have  the  same 
effect,  and  it  is  always  to  be  borne  in  mind  that  the 
Supreme  Court  has  said  more  than  once  that  the 
decision  of  state  legislatures  and  state  courts,  which 
have  knowledge  of  local  conditions,  is  entitled  to  the 
greatest  respect  and  will  not  be  overruled  except 
in  a  perfectly  clear  case. 

The  states,  however,  are  not  the  only  authorities 
in  our  government  which  may  conceivably  wish 
to  establish  systems  of  pensions  of  the  class  under 
consideration.  For  in  Great  Britain  and  in  the 
German  Empire,  which  is  a  federal  government  like 
our  own,  it  is  the  imperial  and  not  the  local  govern¬ 
ment  which  has  made  provision  for  these  pensions 
or  something  very  like  them.  Can  Congress  con¬ 
stitutionally  provide  for  such  pensions  ? 

The  constitution  of  the  United  States  contains  no 
limitations  upon  the  purposes  for  which  federal  taxes 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  31 1 


may  be  levied,  except  those  contained  in  Art.  I,  Sec.  8, 
Paragraph  1,  which  says :  “  Congress  shall  have  power 
to  lay  and  collect  taxes,  duties,  imposts,  and  excises, 
to  pay  the  debts  and  provide  for  the  common  defense 
and  general  welfare  of  the  United  States.”  Inasmuch 
as  the  government  of  the  United  States  is  regarded 
as  one  of  enumerated  powers,  it  is  considered  that  the 
latter  part  of  this  clause  does  not  contain  a  grant  of 
new  power,  but  rather  imposes  a  limitation  upon 
the  purposes  for  which  the  taxing  power  may  be  used. 
So  we  may  assume  that  the  purposes  of  federal  taxa¬ 
tion  are  limited  to  paying  the  debts  and  providing 
for  the  common  defense  and  general  welfare. 

We  have,  however,  practically  no  judicial  decisions 
upon  the  question  of  the  propriety  of  the  purposes 
of  federal  taxation,  and  naturally  also  none  as  to  old 
age,  sickness,  and  accident  pensions.  There  are,  it  is 
true,  a  great  number  of  cases  construing  the  laws  under 
which  pensions  have  been  granted  to  persons  who 
at  one  time  were  soldiers  or  sailors  of  the  United 
States.  But  in  these  cases  the  question  of  the  con¬ 
stitutionality  of  this  disposition  of  the  public  funds 
has  not  been  discussed.  On  the  contrary,  the  consti¬ 
tutionality  has  been  assumed  and  the  cases  have  been 
concerned  with  the  nature  of  the  right  to  the  pension, 
which  has  been  held  to  be  a  gratuity ; 1  or  with  the 
criminal  provisions  of  pension  laws  adopted  with 
the  idea  of  preventing  the  grant  of  the  pensions  to 
improper  persons.2  It  is  true  that,  since  military 
pensions  have  been  held  to  be  gratuities,  the  power 

1  Walton  v.  Cotton,  19  Howard,  355 ;  United  States  v.  Teller, 
107  U.  S.  621. 

a  See  e.g.  Frisbie  v.  United  States,  157  U.  S.  160. 


312  SOCIAL  REFORM  AND  THE  CONSTITUTION 


of  Congress  to  provide  for  gratuitous  allowances  to 
private  individuals  out  of  public  funds  has  been  thus 
indirectly  upheld;  but  it  is  to  be  remembered  that 
these  military  pensions  have  been  given  to  a  class  of 
persons  who  by  reason  of  the  services  they  have 
rendered  have  been  regarded  as  having  special  claims 
to  the  bounty  of  the  government. 

The  only  cases  which  we  have  where  the  courts  have 
been  asked  to  exercise  a  control  over  the  discretion 
of  Congress  in  the  expenditure  of  public  funds  derived 
through  the  exercise  of  the  power  of  taxation  are  the 
Sugar  Bounty  case,1  and  the  Panama  Canal  case.2 

In  both  these  cases  the  Supreme  Court  refused  to 
take  jurisdiction,  and  in  the  Panama  Canal  case  the 
court  said  in  reference  to  the  demand  of  the  plaintiff 
that  the  Secretary  of  the  Treasury  be  enjoined  from 
paying  out  money  for  the  canal:  “The  magnitude 
of  the  plaintiff’s  demand  is  somewhat  startling.  .  .  . 
For  the  courts  to  interfere  and  at  the  instance  of  a 
citizen  who  does  not  disclose  the  amount  of  his  inter¬ 
est,  to  stay  the  work  of  construction  by  stopping  the 
payment  of  money  from  the  Treasury  of  the  United 
States  therefor  would  be  an  exercise  of  judicial  power 
which,  to  say  the  least,  is  novel  and  extraordinary.” 

An  even  stronger  position  is  taken  in  the  Sugar 
Bounty  case.  In  this  case  Congress  passed  an  act 
making  an  appropriation  for  the  payment  of  the  claims 
of  those  persons  who,  relying  upon  an  act  of  Congress 
providing  for  the  payment  of  bounties,  had  engaged 
in  the  manufacture  of  sugar.  The  bounty  act  was 
subsequently  repealed,  but  this  appropriation  had  been 

1  United  States  v.  Realty  Co.,  163  U.  S.  427. 

2  Wilson  v.  Shaw,  204  U,  S.  24. 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  313 


made  in  order  to  tide  over  the  sugar  manufacturers, 
who  were  regarded  as  having  a  moral  claim  against 
the  government.  The  proper  disbursing  officer  of 
the  government,  acting  upon  the  theory  that  both 
the  original  bounty  act  and  the  subsequent  appro¬ 
priation  act  were  unconstitutional  as  appropriating 
public  funds  for  a  private  purpose,  refused  to  pay 
the  bounty,  and  a  mandamus  was  asked  to  force  him 
to  make  the  payment.  The  lower  court  held  the 
act  to  be  unconstitutional  and  denied  the  motion. 
After  this  decision  had  been  reached,  the  plaintiffs 
in  the  suit  sued  the  United  States  government  in 
one  of  the  circuit  courts  of  the  United  States  acting 
as  court  of  claims,  which  gave  judgment  for  the  plain¬ 
tiffs,  and  the  case  was  brought  by  writ  of  error  to  the 
United  States  Supreme  Court.  That  court  believing 
that  the  case  could  be  decided  without  entering  upon 
a  discussion  of  the  validity  of  the  original  sugar 
bounty  acts,  affirmed  the  judgment  of  the  lower 
court.  It  did  so  on  the  theory  that  the  “  debts  of 
the  United  States,”  to  pay  which  Congress  may  by 
the  constitution  levy  and  collect  taxes,  include  moral 
as  well  as  legal  obligations,  saying:  “ Payments  to 
individuals  not  of  right  or  of  a  merely  legal  claim, 
but  payments  in  the  nature  of  gratuity,  yet  having 
some  feature  of  moral  obligation  to  support  them,  have 
been  made  by  the  government  by  virtue  of  the  acts 
of  Congress  appropriating  the  public  money,  ever 
since  its  foundation.  Some  of  the  acts  were  based 
upon  considerations  of  pure  charity.”  It  is,  of  course, 
a  far  cry  from  claims  of  this  sort  to  old  age,  accident, 
and  sickness  pensions,  and  it  is  doubtful  if  the  moral 
obligation  upon  which  payments  to  individuals  have 


314  SOCIAL  REFORM  AND  THE  CONSTITUTION 


been  based  could  be  so  extended  as  to  include  a  moral 
obligation  of  the  government  to  its  needy  classes. 
Yet  that  obligation  has  from  time  immemorial  been 
recognized  in  the  laws  of  England  and  this  country 
with  regard  to  poor  relief. 

Furthermore,  if  it  is  said  that  the  granting  of  old 
age,  sickness,  and  accident  pensions  is  an  unwarrant¬ 
able  extension  of  the  activity  of  the  federal  govern¬ 
ment,  it  may  be  answered  that  such  action  is  no  more 
of  an  extension  of  that  activity  than  the  grant  of 
bounties  for  the  encouragement  of  manufacturing, 
which  is  subject  to  state  rather  than  to  federal  regu¬ 
lation,  or  than  the  grant  of  money  to  educational 
institutions  as  is  provided  by  the  Morrill  Act,  or 
the  gratuitous  distribution  of  seeds  to  farmers. 

Finally,  it  is  to  be  remembered,  as  the  court 
says  in  closing  its  opinion  in  this  sugar  bounty  case, 
that  — 

“in  regard  to  the  question  whether  the  facts  existing  in  any 
given  case  bring  it  within  the  description  of  that  class  of  claims 
which  Congress  can  and  ought  to  recognize  as  founded  upon 
equitable  and  moral  considerations  and  grounded  upon  prin¬ 
ciples  of  right  and  justice,  we  think  that  generally  such  question 
must  in  its  nature  be  one  for  Congress  to  decide  for  itself.  Its 
decision  recognizing  such  a  claim  and  appropriating  money  for 
its  payment  can  rarely,  if  ever,  be  the  subject  for  review  by  the 
judicial  branch  of  the  government.” 

It  must  therefore  be  said  that  there  is  at  least  some 
ground  to  be  found  in  the  decided  cases  and  our  legis¬ 
lative  precedents  for  holding  that  pensions  in  case  of 
old  age,  sickness,  or  accident  which  are  payable  to 
indigent  persons  only  may  be  provided  for  by  the 
Congress  of  the  United  States.  Even  if  this  is  not 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  315 


the  case,  it  would  be  difficult  to  find  a  judicial  remedy 
by  applying  which  the  courts  could  interfere.  The 
two  cases  from  whose  opinions  quotations  have  been 
made  would  seem  to  indicate  that  the  courts  of  the 
United  States  will  not  interfere  to  prevent  the  expen¬ 
diture  of  public  funds.  And  if  the  pensions  were 
to  be  paid  out  of  the  proceeds  of  taxes  which  were 
levied  for  other  purposes  as  well  as  for  the  payment 
of  these  pensions,  the  taxpayer  could  not  bring  the 
matter  up  through  contesting  on  this  ground  the 
constitutionality  of  a  tax  which  from  other  points 
of  view  was  constitutional. 

If  a  precedent  is  desired  for  the  distribution  by 
the  national  government  of  public  property  to  the 
needy  classes  in  order  to  subserve  some  social  end 
conceived  of  as  desirable,  one  need  only  point  toi  the 
policy  which  has  for  so  many  years  been  followed  by 
the  government  in  its  laws  with  regard  to  the  public 
lands.  Originally,  the  public  domain  was  regarded 
as  an  asset  to  be  used  to  pay  the  public  debt  and 
a  portion  of  the  current  expense  of  the  govern¬ 
ment.  Later  on,  viz.  in  1830,  it  was  used  to  en¬ 
courage  settlement  through  the  plan  of  preemption 
in  accordance  with  which  bona  fide  settlers  were  per¬ 
mitted  to  take  up  land  up  to  a  maximum  amount, 
viz.  a  quarter  section,  at  the  minimum  price  of  $1.25 
an  acre.  Still  later,  viz.  in  1862,  the  Homestead 
Act  was  passed.  Under  this  act  land  might  be 
acquired  for  nothing  by  a  five  years’  occupation,  which 
might  be  commuted  at  stated  periods  by  the  pay¬ 
ment  of  a  regular  purchase  price.  Finally,  from  the 
beginning  of  our  history,  land  has  been  granted  outright 
either  to  specified  classes  of  persons  such  as  soldiers, 


31 6  SOCIAL  REFORM  AND  THE  CONSTITUTION 

or  railway  companies,  or  for  specified  purposes  as 
in  the  case  of  the  swamp  land  grants.  The  purpose 
of  the  government  was  twofold.  It  was  first  to  de¬ 
velop  the  resources  of  the  country;  it  was  second 
to  secure  a  class  of  small  proprietors  in  the  belief 
that  such  a  class  made  a  good  economic  basis  for 
democratic  government.  Public  property  was  granted 
to  private  persons  not  merely  to  develop  the  country, 
but  to  offer  greater  equality  of  economic  opportunity 
to  the  less  well-endowed  classes  of  the  community, 
and  no  attempt  was  made  to  declare  unconstitutional 
the  action  of  the  government.  It  is,  of  course,  true 
that  Congress  gets  its  power  to  legislate  with  regard 
to  the  public  lands  from  a  special  clause  in  the  con¬ 
stitution,  but  its  discretion  as  to  the  purposes  for 
which  this  power  may  be  exercised  is  no  greater  than 
it  is  as  to  the  purposes  for  which  the  power  of  taxa¬ 
tion  may  be  used. 

Who,  in  view  of  the  history  of  the  public  domain, 
will  venture  to  say  that  the  constitution  limits  the 
power  of  Congress  to  dispose  of  the  public  funds  as  it 
sees  fit  in  order  to  promote  what  it  considers  to  be 
the  “ public  welfare  of  the  United  States’’  to  provide 
for  which  the  constitution  specifically  says  the  taxing 
power  may  be  used  ? 

Our  conclusions  then,  as  to  the  constitutionality 
of  old  age,  accident,  and  sickness  pensions  are,  assum¬ 
ing  that  the  courts  do  not  change  their  view :  — 

1.  Such  pensions  when  provided  by  state  action 
are  not  prohibited  by  the  fourteenth  amendment  or 
any  other  provision  of  the  federal  constitution,  par¬ 
ticularly  if  they  are  confined  to  indigent  persons. 

2.  If  not  confined  to  indigent  persons,  they  are 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  317 


unconstitutional  under  the  ordinary  provisions  of 
the  state  constitutions. 

3.  Even  if  confined  to  indigent  persons,  they  are 
probably  unconstitutional  under  the  ordinary  pro¬ 
visions  of  the  state  constitutions,  although  there  is 
some  reason  for  believing  they  might  be  justified  as  a 
form  of  outdoor  poor  relief. 

4.  There  is  much  ground  for  the  belief  that  such 
pensions,  particularly  if  confined  to  indigent  persons, 
might  constitutionally  be  provided  by  the  federal  gov¬ 
ernment. 

III.  Provision  for  the  Housing  of  the  Working 

Classes  in  Cities 

The  discussion  of  what  are  public  purposes  of  taxa¬ 
tion,  which  has  already  been  had,  cannot  have  failed 
to  throw  some  light  on  the  question  of  the  constitu¬ 
tionality  of  advances  of  public  funds  to  persons  not 
actually  in  need  to  aid  them,  for  example,  in  acquiring 
homes.  It  may  hardly  be  claimed  in  the  light  of 
what  we  have  seen  that  under  the  existing  state 
constitutions  the  power  of  taxation  may  be  used  for 
this  purpose.  But  it  may  be  said  of  such  schemes 
as  well  as  of  pensions  that  there  is  apparently  no 
objection  to  them  from  the  point  of  view  of  the  limita¬ 
tions  of  the  federal  constitution  on  the  expenditure 
of  public  funds  if  the  funds  to  which  resort  is  had 
are  derived  from  other  sources  than  taxation.  If, 
e.g.,  the  states  or  municipalities  had  derived  large 
funds  from  some  system  of  public  insurance  which 
had  been  provided  for  the  working  or  other  classes, 
there  would  seem  to  be  no  constitutional  objection 


318  social  reform  and  the  constitution 


to  their  making  use  of  them  in  the  manner  suggested, 
in  the  same  way  that  Germany  is  now  doing,  with 
the  twofold  purpose  of  investment  and  social  reform. 
Similar  disposition  might  also  be  made  of  the  surplus 
revenue  from  profitable  quasi-commercial  undertak¬ 
ings  such  as  railways,  gas,  water  and  electric  light 
works.  The  loaning  to  individuals  of  public  funds 
not  derived  from  taxation  is  not  prohibited  by  the 
federal  constitution,  but  is  at  the  present  time  by 
most  of  the  state  constitutions.  Indeed,  the  misuse 
of  the  power  by  the  states  is  probably  responsible 
for  the  provisions  prohibiting  it  which  we  so  commonly 
find.  The  state  of  New  York,  however,  for  many 
years  loaned  to  individuals  the  fund  known  as  the 
United  States  Deposit  Fund,  which  originated  in  the 
distribution  of  the  surplus  of  the  United  States  gov¬ 
ernment  in  1837. 

The  constitutionality  of  such  schemes  may,  however, 
be  questioned  from  another  point  of  view.  For  their 
successful  realization  would  in  most  cases  involve 
resort  to  the  exercise  by  the  government,  either  state 
or  municipal,  of  the  power  of  eminent  domain,  and 
this  power,  like  the  power  of  taxation,  may  be  exer¬ 
cised  only  for  public  purposes.  The  question  there¬ 
fore  naturally  arises,  —  What  purposes  are  public 
from  the  viewpoint  of  the  constitutional  limitations  on 
the  exercise  of  the  power  of  eminent  domain?  At 
the  outset,  it  must  be  noted  that,  because  compen¬ 
sation  must  be  paid  to  the  party  whose  property  is 
taken  under  the  power  of  eminent  domain,  while  no 
such  compensation  can  in  the  nature  of  things  be  given 
when  it  is  the  power  of  taxation  which  is  exercised,  the 
courts  are  more  apt  to  regard  a  purpose  as  public  in 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  319 

the  former  than  in  the  latter  case.  Thus,  while  it  is 
unquestionably  unconstitutional  to  tax  one  person 
for  the  construction  of  a  private  factory  not  open 
to  general  public  use,  it  is  perfectly  proper,  on  grant¬ 
ing  compensation,  to  give  one  riparian  owner  the 
right  to  build  for  the  purposes  of  a  private  factory 
a  dam,  the  necessary  effect  of  which  will  be  to  deprive 
the  riparian  owners  farther  up  the  stream  of  property 
rights.  This  principle  was  apparently  applied  orig¬ 
inally  in  the  case  of  grist  mills,  which,  it  has  been 
shown,  are  quasi  public  enterprises.  But  it  was  later 
applied  to  ordinary  private  factories,  and  this  appli¬ 
cation  of  the  principle  was  upheld  partly  at  any 
rate  on  the  ground  of  the  general  benefit  the  public 
derived  from  it,  long  before  the  adoption  of  the  four¬ 
teenth  amendment.  Since  the  adoption  of  that  amend¬ 
ment  the  constitutionality  of  such  legislation  has  been 
upheld  also  by  the  Supreme  Court.1  It  may  therefore 
be  said  that  that  provision  of  the  federal  constitution 
was  in  this  instance  interpreted  in  the  light  of  existing 
conditions  and  that  the  Mill  Act  cases,  although  show¬ 
ing  that  there  are  exceptions  to  the  general  rule,  do 
not  have  great  authority  upon  the  question  at  issue. 

Bearing  in  mind  then  that  a  purpose  which  may  be 
private  from  the  point  of  view  of  the  power  of  taxa¬ 
tion  may  be  public  from  the  point  of  view  of  the  power 
of  eminent  domain,  let  us  examine  some  of  the  cases 
which  have  decided  what  purposes  are  either  public 
or  private  from  the  latter  point  of  view.  There  are 
four  classes  of  cases  bearing  on  this  point :  — 

In  the  first  place,  there  are  those  which,  like  the  Tax 
cases,  hold  that  the  purpose  is  public  where  the  enter- 
1  Head  v.  Amoskeag  Mfg.  Co.,  113  U.  S.  9. 


320  SOCIAL  REFORM  AND  THE  CONSTITUTION 

prise  for  which  the  property  is  condemned  is  one 
of  which  the  public  generally  make  use.1 

The  second  class  of  cases  includes  those  decided 
in  view  of  peculiar  and  very  stringent  provisions  of 
state  constitutions  strictly  limiting  the  legislature  in 
its  power  to  grant  the  right  of  eminent  domain  to 
private  persons.  The  cases  in  this  class  do  not  permit 
the  exercise  of  the  right  of  eminent  domain  for  a  pur¬ 
pose  which  does  not  benefit  the  public  generally.2 

The  third  class  includes  those  cases  which  decide 
that  under  the  ordinary  constitutional  provisions  the 
power  of  eminent  domain  may  not  be  given  to  a 
private  person  where  the  undertaking  for  which  it 
is  employed  is  not  one  of  which  the  public  may  make 
use.3 

Finally,  there  are  the  cases  which,  applying  the 
principle  at  the  bottom  of  the  original  Mill  Acts, 
hold  under  the  ordinary  constitutional  provisions 
that  where  the  economic  development  of  the  country 
or  the  advantageous  use  of  property  requires,  the 
legislature  may  on  providing  for  compensation  author¬ 
ize  one  person  to  take  the  property  of  another  for  a 
private  purpose,  i.e.  private  in  the  sense  that  the 


1  A  case  of  this  sort  is  Cotton  v.  Miss.  &  Boom  Co.,  22  Minn.  372, 
where  a  law  giving  a  boom  company  on  the  Mississippi  River  the 
right  to  condemn  riparian  rights  was  held  to  be  constitutional. 

2  A  good  example  of  this  class  is  Healy  Lumber  Company  v.  Morris, 
33  Wash.  490,  where  an  act  of  the  legislature  granting  the  right  to 
condemn  property  for  a  lumber  road  or  flume  was  held  unconstitu¬ 
tional. 

3  See  e.g.  Matter  of  Eureka  Basin  &  Mfg.  Co.,  96  N.  Y.  42;  see 
also  Missouri  Ry.  Co.  v.  Nebraska,  164  U.  S.  403,  which  held  uncon¬ 
stitutional  as  using  the  power  of  eminent  domain  for  a  private  pur¬ 
pose  an  act  of  a  state  legislature  obliging  a  railway  company  to  permit 
private  persons  to  build  a  private  grain  elevator  on  its  right  of  way. 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  321 


general  public  does  not  have  the  right  to  make  use 
of  the  undertaking  for  which  the  power  of  eminent 
domain  is  exercised.1  It  must  be  said,  however, 
that  apart  from  the  Mill  Act  cases,  these  cases  are 
very  few  in  number.  There  are  also  other  similar 
cases  based  on  peculiar  provisions  of  the  state  con¬ 
stitutions  which,  like  the  constitution  of  Colorado, 
specifically  declare  some  particular  occupation  like 
mining  to  be  a  public  one. 

Such,  however,  is  the  doctrine  which  the  Supreme 
Court  of  the  United  States  applies  to  the  decision 
whether  under  the  fourteenth  amendment  a  given 
purpose  is  a  proper  one  for  the  exercise  of  the  right  of 
eminent  domain.  This  practical  result  was  reached  as 
far  back  as  1884  in  Head  v.  Amoskeag  Mfg.  Co.,2  when 
the  court,  following  the  rule  adopted  in  the  New 
England  States,  based  its  decision  that  a  mill  act 
affecting  merely  private  mills  was  constitutional  on 

1  See  e.g.  The  Hand  Gold  Mining  Company  v.  Parker,  59  Ga.  419. 
In  this  case  an  act  was  held  constitutional  which  gave  a  mining  com¬ 
pany  the  right  on  payment  of  damages  to  construct  a  flume  or  aque¬ 
duct  over  vacant  lands  in  a  specified  county.  The  court  justified  its 
decision  partly  by  the  consideration  that  “the  increased  production 
of  gold  from  the  mines  of  Lumpkin  County  by  the  means  as  pro¬ 
vided  for  in  the  defendant’s  charter,  must  necessarily  be  for  the  public 
good,  inasmuch  as  it  will  increase  for  the  use  of  the  public  a  safe,  sound, 
constitutional  circulating  medium,  which  is  of  vital  importance  to  the 
permanent  welfare  and  prosperity  of  the  people  of  the  State  of  Georgia 
as  well  as  of  the  people  of  the  United  States.”  See  also  New  Central 
Coal  Co.  v.  Granges  Creek  Co.,  37  Md.  537;  and  Turner  v.  Nye, 
154  Mass.  579,  where  a  statute  was  held  constitutional  which  per¬ 
mitted  one  person  for  purposes  of  private  fish  culture  to  flood  lands 
of  another  on  the  theory  that  the  legislature  could  regulate  the  rights 
of  owners  of  lands  so  as  to  provide  for  the  most  advantageous  use 
thereof,  even  where  one  owner  might  as  a  result  of  the  act  be  deprived 
of  the  title  to  his  property  against  his  will  but  upon  compensation. 

2  113  U.  S.  9. 

Y 


322  SOCIAL  REFORM  AND  THE  CONSTITUTION 


the  ground  that  such  a  statute  may  be  “  considered 
as  regulating  the  manner  in  which  the  rights  of  pro¬ 
prietors  of  lands  adjacent  to  a  stream  may  be  asserted 
and  enjoyed  with  a  due  regard  to  the  interests  of  all 
and  the  public  good.”  The  court  in  this  case  did 
not  seem  to  think  its  decision  required  a  considera¬ 
tion  of  what  it  called  “  the  important  and  far-reaching 
question”  whether  the  Mill  Acts  authorize  a  taking 
of  private  property  for  public  use.  In  a  later  case, 
however,  decided  in  1904,  viz.  Clark  v.  Nash,1  the 
court  adopted  the  view  that  the  grant  by  an  act  of 
the  legislature  to  an  individual  of  the  right  to  condemn 
land  for  the  purpose  of  a  ditch  to  be  used  to  convey 
water  for  either  irrigation  or  mining  was  constitu¬ 
tional  under  the  conditions  present  in  the  particular 
case.  The  most  important  fact  which  influenced 
the  court  would  appear  to  have  been  the  aridity  of 
the  region  and  the  impossibility  of  the  development 
of  the  resources  of  the  state,  viz.  Utah,  if  the  act 
were  held  unconstitutional.  The  court  reiterates  the 
statement  it  made  in  the  Fallbrook  Irrigation  case 
that  in  the  determination  of  these  questions  it  must 
rely  very  largely  on  the  decision  of  the  legislature 
and  courts  of  the  state  in  which  the  case  arises,  as  to 
the  necessity  or  expediency  of  the  legislation  attacked. 

In  Strickland  v.  Highland  Boy  Mining  Co.2  the 
Supreme  Court  reaffirmed  Clark  v.  Nash  and  upheld 
the  exercise  of  the  right  of  eminent  domain  for  the 
purpose  of  an  aerial  railway  to  be  used  by  a  mine. 
It  says  of  Clark  v.  Nash  that 

“  in  discussing  what  constitutes  a  public  use  it  recognized  the 
inadequacy  of  use  by  the  general  public  as  a  universal  test. 

1 198  U.  S.  361.  *  200  U.  S.  527. 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  323 


While  emphasizing  the  great  caution  necessary  to  be  shown  it 
proved  that  there  might  be  exceptional  times  and  places  in 
which  the  very  foundations  of  public  welfare  could  not  be  laid 
without  requiring  concessions  from  individuals  to  each  other 
upon  due  compensation  which  under  other  circumstances  would 
be  left  wholly  to  voluntary  consent.  In  such  unusual  circum¬ 
stances  there  is  nothing  in  the  fourteenth  amendment  which 
prevents  a  state  from  requiring  such  concessions.” 1 

Perhaps  the  farthest  the  Supreme  Court  has  gone 
in  upholding  the  exercise  of  the  power  of  eminent  do¬ 
main  by  a  state  is  in  Offield  v.  New  York,  New  Haven 
&  Hartford  Railroad.2  In  this  case  the  court  upheld 
a  state  law,  authorizing  a  railway  company  which 
owns  more  than  three  fourths  of  the  capital  stock  of 
any  other  railroad  corporation,  and  which  “  cannot 
agree  with  the  holders  of  outstanding  stock  for  the 
purchase  of  the  same,  upon  a  finding  by  a  judge 
of  the  Superior  Court  that  such  purchase  will  be 
for  the  public  interest”  to  “cause  such  outstanding 
stock  to  be  appraised.”  The  act  provided  further 
that  when  the  amount  of  such  appraisal  shall  have 
been  paid  or  deposited  the  stockholder  or  stock¬ 
holders  whose  stock  shall  have  been  so  appraised 
shall  cease  to  have  any  interest  therein  and  shall  on 
demand  surrender  all  certificates  for  such  stock  with 
duly  executed  powers  of  attorney  for  transfer  thereon 
to  the  corporation  applying  for  such  appraisal.  The 
court  held  that  this  statute  did  not  deprive  the  stock¬ 
holder  of  his  property  without  due  process  of  law  and 

1  See  also  Byrnes  v.  Douglas,  27  C.  C.  A.  399,  where  the  condemna¬ 
tion  of  property  for  a  tunnel  for  a  mine  was  held  perfectly  proper 
though  without  any  consideration  of  the  constitutionality  of  the  pro¬ 
ceeding  from  the  view-point  of  the  fourteenth  amendment. 

2  203  U.  S.  372. 


324  SOCIAL  REFORM  AND  THE  CONSTITUTION 


did  not  impair  the  obligation  of  a  contract  in  that  it 
abrogated  the  lease  of  one  railroad  by  the  other,  since 
whatever  value  the  lease  gave  the  shares  of  stock 
would  be  represented  in  their  appraisement. 

The  power  of  the  state  notwithstanding  the  four¬ 
teenth  amendment  to  deprive  a  person  of  his  property 
even  without  direct  compensation,  where  the  public 
good  would  seem  to  require  it  is  also  recognized  in  a 
recent  case,1  which  upheld  a  state  law  making  provi¬ 
sion  for  a  bank  depositors’  guaranty  fund.  This  fund 
was  formed  from  assessments  levied  upon  all  state 
banks  to  the  extent  of  one  per  cent  of  their  deposits, 
and  in  case  the  cash  of  an  insolvent  bank  immediately 
available  was  not  sufficient  to  pay  depositors  in  full 
the  state  authorities  were  to  withdraw  from  the 
fund  and  from  additional  assessments  if  required  the 
amount  needed  to  make  up  the  deficiency.  It  was 
objected  to  this  law  that  it  deprived  persons  of  their 
property  without  due  process  of  law  by  taking  private 
property  for  private  use  without  compensation.  In 
answer  to  this  objection,  the  court,  Mr.  Justice  Holmes 
delivering  the  opinion,  says :  — 

“In  the  first  place  it  is  established  by  a  series  of  cases  that 
an  ulterior  public  advantage  may  justify  a  comparatively  insig¬ 
nificant  taking  of  private  property  for  what  in  its  immediate 
purpose  is  a  private  use  [citing  the  cases  just  referred  to]  and  in 
the  next  it  would  seem  that  there  may  be  other  cases  beside  the 
everyday  one  of  taxation,  in  which  the  share  of  each  party  in 
the  benefit  of  a  scheme  of  mutual  protection  is  sufficient  compen¬ 
sation  for  the  correlative  burden  that  it  is  compelled  to  assume. 
See  Ohio  Oil  Co.  v.  Indiana,  177  U.  S.  190.” 2 

1  Noble  State  Bank  v.  Haskell,  31  S.  C.  R.  186. 

2  Another  interesting  expression  by  the  Supreme  Court  of  its 
opinion  as  to  the  effect  of  the  fourteenth  amendment  on  the  power  of 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  325 


In  all  these  cases  both  in  the  state  courts  and  in  the 
Supreme  Court  of  the  United  States,  it  will  be  noted 
that  the  consideration  appealing  with  particular 
force  to  the  courts  was  the  necessity  of  extending 
the  conception  of  public  purpose  at  the  expense  of 
rights  in  private  property  in  order  to  secure  the  most 
advantageous  development  of  the  natural  resources 
of  the  region.  In  New  England  this  has  consisted 
for  the  most  part  in  the  development  of  water  power 
for  manufacturing  purposes.  In  the  arid  or  moun¬ 
tainous  regions  of  the  West  and  middle  West  it  has 
consisted  in  the  development  of  the  agricultural 
or  mining  industries.  In  none  of  these  cases  has 
the  question  been  raised  whether  in  the  conditions 
of  economic  inequality  incident  to  industrial  and 
urban  life  the  character  of  the  purpose  for  which  the 
right  of  eminent  domain  may  be  exercised  may  be 
influenced  by  those  conditions,  whether,  in  other 
words,  the  power  may  be  used  in  order  to  secure  not 
more  effective  production  but  more  economic  equality, 
i.e.  more  equality  in  distribution  or  opportunity. 

The  question  here,  as  before,  whether  the  Supreme 
Court  will  give  the  same  effect  to  the  peculiar  economic 
conditions  which  are  developed  by  our  industrial 
civilization  as  it  recognizes  should  be  given  to  the 

the  states  is  to  be  found  in  Interstate  &c.  Railway  Company  v.  Com¬ 
monwealth,  207  U.  S.  79,  87,  where  Mr.  Justice  Holmes  says:  “If 
the  fourteenth  amendment  is  not  to  be  a  greater  hamper  upon  the 
established  practices  of  States  in  common  with  other  governments 
than  I  think  was  intended,  they  must  be  allowed  a  certain  latitude  in 
the  minor  adjustments  of  life  even  though  by  their  action  the  burdens 
of  a  part  of  the  community  are  somewhat  increased.  The  traditions 
and  habits  of  centuries  were  not  intended  to  be  overthrown  when 
that  amendment  was  passed.” 


326  SOCIAL  REFORM  AND  THE  CONSTITUTION 


peculiar  economic  conditions  resulting  from  climatic 
and  geographical  situation,  is  one  to  which  no  certain 
answer  can  be  given.  But  if  it  should  recognize 
that  economic  or  social  conditions,  are  to  have  the 
same  effect  as  climatic  conditions,  it  can  hardly  be 
doubted  that  it  would  consider  the  power  of  eminent 
domain  as  used  for  a  public  purpose  where  it  was  used 
in  such  conditions  of  population  congestion  as  exist, 
e.g.y  in  the  city  of  New  York  to  provide  homes  for 
the  poorer  classes  in  the  community  either  at  a  mod¬ 
erate  rental,  or  at  a  price  and  under  such  conditions 
of  sale  as  would  enable  the  needy  classes  to  acquire 
homes.  If  an  intimate  connection  can  be  shown 
between  the  enterprise  for  the  purpose  of  which  the 
power  is  exercised  and  the  public  health,  an  additional 
reason  for  upholding  the  constitutionality  of  the 
enterprise  is  of  course  secured.  For  considerations 
of  health  are  very  apt  to  control  the  decision  of  the 
court. 

Intimately  connected  with  this  question  is  the 
question  whether  in  order  more  effectively  to  carry 
out  some  local  improvement  or  in  order  to  participate 
in  the  increase  in  the  value  of  the  land  due  to  the  new 
improvement,  a  city,  e.g.,  may  be  authorized  to  con¬ 
demn  a  larger  amount  of  land  than  is  absolutely 
necessary  for  the  purposes  of  the  specific  improvement. 
This  is  what  is  known  popularly  as  excess  condemna¬ 
tion.  This  method  is  adopted  in  Germany  and  has 
been  applied  also  in  a  few  specific  instances  in  Eng¬ 
land.  It  has  rarely,  however,  been  resorted  to  in  the 
United  States  in  such  a  manner  as  to  make  an  adju¬ 
dication  upon  the  question  at  issue  necessary,  and  as 
a  result  there  are  few  cases  exactly  in  point. 


CONSTITUTIONALITY  OF  GOVERNMENT  AID  327 


There  are,  however,  a  number  of  cases  which  hold 
that  a  city,  which  with  the  intention,  e.g .,  of  making 
a  park,  has  obtained  land  by  the  exercise  of  the  right 
of  eminent  domain,  and  finds  that  it  has  more  land  on 
its  hands  than  is  necessary,  may  sell  such  lands  to 
private  persons.1  These  cases  may  not,  however,  be 
regarded  as  authorities  for  the  general  proposition 
that  the  legislature  may  provide  for  excess  condem¬ 
nation  with  the  direct  intention  of  using  the  excess 
condemned  for  a  private  purpose.  Thus,  in  the 
Matter  of  the  City  of  Rochester  the  court  distinctly 
says  in  speaking  of  an  act  of  the  legislature  which 
authorized  the  Park  Commissioners  of  the  city  to 
sell  at  auction  lands  acquired  by  condemnation  for 
a  park  which  such  commissioners  should  determine 
were  not  necessary  for  park  purposes :  — 

“It  is  claimed  that  this  provision  is  in  conflict  with  the  pro¬ 
vision  of  the  constitution  respecting  the  taking  of  private  prop¬ 
erty  for  public  use,  as  it  in  fact  authorizes  the  city  to  take  it  for 
a  purpose  not  public.  We  think  the  objection  without  merit  or 
substance.  Of  course  the  city  would  not  take  private  property 
for  the  purpose  of  selling  or  dealing  in  it,  but  having  once  ac¬ 
quired  it  for  a  park  and  it  becoming,  in  the  course  of  time,  un¬ 
necessary  or  useless  for  that  purpose  by  the  growth  of  the  city 
or  other  changes  in  situation,  a  sale  in  the  manner  prescribed  by 
the  statute  would  be  within  the  legitimate  functions  of  the  city 
as  a  municipal  corporation  and  power  to  that  end  conferred  by 
the  state  at  any  time  or  in  the  act  authorizing  the  taking  cannot 
invalidate  the  delegated  right  to  exercise  the  right  of  eminent 
domain.” 

Furthermore,  the  question  would  appear  to  have 
been  decided  against  the  constitutionality  of  taking 

1  Brooklyn  Park  Com.  v.  Armstrong,  45  N.  Y.  70 ;  Matter  of  the 
City  of  Rochester,  127  N.  Y.  243. 


328  SOCIAL  REFORM  AND  THE  CONSTITUTION 

by  condemnation  any  land  in  amount  in  excess  of 
what  is  required  for  public  purposes  by  Embury  v. 
Conner.1  It  may  therefore  be  said  that  excess  con¬ 
demnation  is  improper  under  the  ordinary  limita¬ 
tions  of  the  state  constitution.  The  very  general 
belief  that  excess  condemnation  is  unconstitutional 
under  the  state  constitutional  provisions  is  probably 
responsible  for  the  fact  that  we  have  no  decisions  of 
the  United  States  Supreme  Court  on  the  question. 

It  is,  however,  to  be  noticed  that  the  same  reasons 
which  have  led  the  Supreme  Court  of  the  United 
States  to  uphold  the  constitutionality  of  the  Mill 
Acts  and  other  similar  legislation,  viz.  the  desirability 
of  permitting  the  power  of  the  government  to  be  so 
applied  as  to  bring  about  the  most  profitable  use 
of  economic  resources,  would  be  present  in  the  case 
of  attempts  upon  the  part  of  city  governments,  e.g.y 
to  condemn  an  amount  of  land  in  excess  of  what  was 
needed  for  a  particular  improvement.  For  in  many 
cases  it  is  only  through  such  action  that  a  city  can 
most  economically  carry  out  its  plan. 

There  is  then  considerable  justification  for  the 
belief  that  our  constitutional  limitations  are,  if  liber¬ 
ally  interpreted,  not  a  serious  obstacle  to  the  adoption 
of  most  of  the  measures  which  are  being  put  into 
force  by  modern  governments  for  the  aid  of  the  needy 
classes.  The  only  point  in  which  great  doubt  may 
be  felt  is  as  to  the  power  of  taxation  whose  use  for 
anything  but  a  distinctly  public  purpose  has  met  with 
the  disapproval  of  the  courts. 

1 3  N.  Y.  511. 


CHAPTER  VIII 


THE  ATTITUDE  OF  THE  COURTS  TOWARDS 
MEASURES  OF  SOCIAL  REFORM 

The  discussion  which  has  been  had  of  the  decisions 
of  the  courts  as  to  the  constitutionality  of  concrete 
proposals  for  political  or  social  reform  can  hardly 
fail  to  have  produced  the  impression  that  the  Supreme 
Court  of  the  United  States  has  on  the  whole  been 
more  liberal  than  the  state  courts  in  its  attitude 
towards  the  measures  of  regulation  or  positive  inter¬ 
position  by  the  states  which  have  been  deemed 
requisite  to  remedy  the  evils  attendant  upon  modern 
industrial  civilization  as  it  is  seen  in  the  United  States. 
Seldom  has  the  Supreme  Court  declared  unconsti¬ 
tutional  from  the  point  of  view  of  the  federal  consti¬ 
tution  an  act  of  a  state  legislature  offering  a  remedy 
for  social  abuses  which  was  not  pretty  clearly  opposed 
to  some  specific  provision  of  the  constitution.  The 
cases  in  which  the  Supreme  Court  has  most  frequently 
declared  invalid  state  laws  have  been  those  in  which 
the  state  legislatures  have  attempted  to  regulate 
what  it  regarded  as  foreign  or  interstate  commerce,1 
or  have  imposed  unreasonable  burdens  upon  public 
service  corporations  2  or  fixed  the  rates  to  be  charged 

1  See  e.g.  Western  Union  Telegraph  Co.  v.  Kansas,  216  U.  S.  1, 
where  the  statute  attempted,  in  the  opinion  of  the  court,  to  impose 
a  tax  on  interstate  commerce. 

2  See  e.g.  Illinois  Central  Ry.  Co.  v.  Illinois,  163  U.  S.  142,  where 
the  state  attempted  to  force  a  fast  interstate  train  to  turn  aside  from 
the  main  route  and  stop  at  a  place  named  in  the  statute. 

329 


330  SOCIAL  REFORM  AND  THE  CONSTITUTION 


for  public  service  in  violation  of  existing  contracts, 
or  so  low  as  to  result  in  a  confiscation  of  property.1 
But  even  along  these  lines  the  later  decisions  of  the 
court  show  a  reluctance  to  recognize  a  contract  that 
a  certain  rate  may  be  charged,  or  a  property  right 
in  either  the  power  possessed  by  a  public  service  cor¬ 
poration  to  charge  a  specific  rate  or  in  its  franchise.2 

It  is  of  course  true  that  the  Supreme  Court  has  been 
able  to  hold  an  act  of  a  state  legislature  constitutional 
only  where  a  similar  decision  has  been  reached  by  a 
state  court.  But  it  is  not  to  be  denied  that  state 
courts  have  held  unconstitutional  legislative  acts 
which  when  coming  before  the  Supreme  Court  from 
other  states  have  been  regarded  as  constitutional 
by  that  body.  It  is  also  true  that  state  courts  have 
sometimes  been  governed  in  their  decisions  by  the 
provisions  of  state  constitutions,  but  it  is  nevertheless 
the  case  that  some  if  not  most  of  the  state  courts 
have  held  more  conservative  views  than  the  United 
States  Supreme  Court  either  of  the  federal  constitution 
or  of  clauses  in  the  state  constitutions  very  similar 
to  clauses  in  the  federal  constitution. 

The  reason  for  the  greater  conservatism  of  some 
of  the  state  courts  is  probably  to  be  found  in  the  fact 
that  the  economic  conditions  of  the  particular  states 
are  less  complex  than  those  of  the  United  States  as  a 
whole.  The  simple  local  conditions  with  which  the 
particular  state  courts  are  acquainted  have  an  influ¬ 
ence  on  their  views  as  to  the  constitutionality  of 

1  See  e.g.  Minneapolis  v.  Minneapolis  Street  Ry.  Co.,  215  U.  S. 
417;  Smyth  v.  Ames,  169  U.  S.  406. 

2  See  e.g.  Knoxville  Water  Co.  v.  Knoxville,  212  U.  S.  1 ;  Con¬ 
solidated  Gas  Co.  v.  Willcox,  ibid.  19;  Home  Telephone  Co.  v.  Los 
Angeles,  211  U.  S.  265. 


ATTITUDE  OF  THE  COURTS 


331 


certain  legislation.  Thus  it  would  be  difficult  for 
judges  in  a  state  that  was  not  arid  in  character  to 
consider  that  irrigation  was  a  public  purpose  for  which 
the  power  either  of  taxation  or  of  eminent  domain 
may  be  exercised.  In  the  case  of  the  United  States 
Supreme  Court,  however,  practically  all  kinds  of 
climatic,  geographical,  and  economic  conditions  have 
their  representation,  since  all  great  sections  of  the 
country  are  as  a  rule  represented  in  that  body.  Fur¬ 
thermore,  the  fact  that  the  justices  of  the  Supreme 
Court  of  the  United  States  have  a  life  tenure  probably 
has  the  consequence  of  securing  a  court  which  has  a 
greater  consideration  for  the  interests  and  needs  of 
the  public  than  would  be  the  case  were  the  judicial  term 
a  short  one.  For  under  present  conditions,  the  judges 
of  the  state  courts  are  almost  always  chosen  from  the 
bar,  and  members  of  the  bar  usually  represent  pri¬ 
vate  rather  than  public  interests.  It  is  only  after 
service  on  the  bench  has  begun  that  prejudice  and 
bias  in  favor  of  private  interests  cease.  The  longer 
the  judicial  service,  the  more  easy  is  it  for  considera¬ 
tions  of  public  interest  to  secure  an  influence  on  the 
judicial  attitude  of  mind.  It  is  quite  commonly 
the  case  also  for  members  of  the  Supreme  Court  to 
be  selected  from  the  bench  rather  than  from  the  bar. 
They  begin  their  service  on  the  court  thus  with  a 
greater  sense  of  responsibility  for  the  maintenance  of 
public  interests  than  does  the  ordinary  state  judge. 

Up  to  the  present  time,  however,  it  may  not  be 
said  that  even  in  the  Supreme  Court  existing  economic 
conditions  have  always  been  accorded  the  influence 
which  they  should  have.  Acts  of  Congress  and  of 
state  legislatures  are  declared  by  that  body  to  be  un- 


332  SOCIAL  REFORM  AND  THE  CONSTITUTION 


constitutional  not  because  their  enactment  is  thought 
undesirable  or  inexpedient  but  because  they  cannot 
be  made  to  conform  to  a  conception  of  the  organi¬ 
zation  and  powers  of  government  which  we  have 
inherited  from  the  eighteenth  century. 

There  are  thus,  because  of  the  attitude  of  either 
the  Supreme  Court  or  the  state  courts,  certain  meas¬ 
ures  of  political  and  social  reform  which  many  believe 
to  be  absolutely  necessary  either  now  or  in  the  future 
(if  we  may  judge  of  their  necessity  by  the  legislative 
experience  of  other  countries  in  similar  conditions  to 
those  of  the  United  States),  but  which  we  in  the  United 
States  are  probably  precluded  from  adopting  because 
of  the  attitude  now  taken  by  our  courts  towards  our 
practically  unamendable  federal  constitution.  There 
are,  it  is  true,  not  nearly  so  many  of  these  measures 
as  are  popularly  supposed  to  exist.  But  there  are 
some.  Among  them  may  possibly  be  mentioned  some 
which  are  apparently  regarded  as  essential  parts  of  a 
program  of  effective  social  reform :  such  as  pensions 
or  public  insurance  in  case  of  old  age,  accident  or 
sickness  where  the  recipient  of  the  pension  or  insurance 
is  not  actually  a  pauper  and  where  the  fund  from  which 
such  pension  or  insurance  is  obtained  is  derived  from 
taxation;  the  regulation  of  the  hours  of  adult  male 
labor  in  any  but  the  evidently  most  harmful  trades ; 
effective  regulation  of  the  use  of  urban  land ;  and  the 
use  of  the  powers  of  taxation  and  eminent  domain 
for  the  purpose  of  furthering  schemes  to  provide 
aid  for  the  needy  classes.  Furthermore,  it  is  some¬ 
what  doubtful  whether  without  amendment  of  the 
federal  constitution  our  political  organization  can 
develop  in  such  a  way  as  to  be  in  accord  with  even 


ATTITUDE  OF  THE  COURTS 


333 


existing  economic  conditions,  not  to  speak  at  all  of 
the  future.  The  distinction  between  interstate  and 
intrastate  commerce  which  has  unfortunately  been 
made  as  to  land  commerce,  although  it  has  practically 
been  abandoned  as  to  navigation  or  water  commerce, 
is  at  the  present  time  an  almost  insurmountable 
obstacle  to  change  in  the  distribution  of  political 
powers  between  the  federal  government  and  the 
states,  while  any  centralization  of  the  private  law 
of  the  country  is  commonly  believed  to  be  impossible 
of  accomplishment  except  through  the  -  common 
action  of  the  legislatures  of  the  separate  states  — 
a  method  whose  feasibility  is  under  the  most  favor¬ 
able  conditions  extremely  doubtful  and  whose  progress 
if  begun  is  inevitably  very  slow. 

Some  of  the  measures  which  have  been  mentioned 
will  naturally  not  be  regarded  by  all  as  having  the 
characteristic  of  pressing  necessity.  Others  may  be 
regarded  by  certain  classes  in  the  community  as 
inexpedient  under  any  conditions.  But  it  is  believed 
that  there  are  few  persons  having  the  welfare  of  this 
country  really  at  heart,  or  not  blinded  by  prejudice  or 
class  interest,  who  will  assert  that  the  conditions  of  the 
American  people  are  so  peculiar  that  we  should  close 
for  them  the  avenues  open  to  other  peoples  through 
which  orderly  and  progressive  political  development 
in  accordance  with  changing  economic  and  social 
conditions  may  proceed.  Few  can  refrain  from  asking 
the  question  why  Americans  alone  of  all  peoples 
should  be  denied  the  possibility  of  political  and  social 
change  ? 

In  order,  however,  that  this  possibility  may  exist 
in  the  constitutional  conditions  of  the  American 


334  SOCIAL  REFORM  AND  THE  CONSTITUTION 


Republic  the  courts  must  be  brought  to  see  things 
as  they  are  and  to  appreciate  the  responsibility  which 
they  assumed  when  they  determined  contrary  to 
the  experience  of  all  other  peoples  that  they  had  the 
constitutional  right  to  overturn  an  act  of  the  legis¬ 
lature.1  That  the  courts  have  this  constitutional 
power  no  one  at  the  present  time  will  deny.  That 
under  the  political  conditions  now  prevailing  in  this 
country  they  should  continue  to  exercise  this  power 
most  will  admit.  But  it  certainly  may  be  demanded 
of  the  courts  that  they  realize  that  their  possession 
of  this  power  is  a  trust  which  few  if  any  other  nations 
have  been  willing  to  impose  upon  judicial  bodies. 

We  Americans  have  become  so  accustomed  to  seeing 
the  courts  revise  the  determinations  of  the  legislatures 
that  we  are  apt  to  overlook  the  fact  that  the  power 
of  courts  to  declare  legislative  acts  unconstitutional 
is  an  extraordinary  one,  and  to  forget  that  its  recog¬ 
nition  as  a  doctrine  of  law  was  only  secured  after  a 
struggle.  The  independence  of  the  judiciary  upon 
which  this  power  is  based  is  regarded  quite  com¬ 
monly  as  one  of  the  cardinal  features  of  the  principle 
of  separation  of  powers,  which,  as  has  been  shown, 
lies  at  the  basis  of  our  political  system.  It  was 
introduced  into  our  constitutional  law  in  the  belief 
that  we  were  obeying  the  injunctions  of  the  great 
French  political  philosopher,  Montesquieu,  who  was 
supposed  to  have  formulated  the  principle  as  a  result 
of  his  observations  of  the  English  political  institutions 

1  Judge  Baldwin,  although  believing  that  this  principle  “rests  in 
solid  reason,”  says  of  it :  “This  right  of  a  court  to  set  itself  up  against 
a  legislature,  and  of  a  court  of  one  sovereign  to  set  itself  up  against 
the  legislature  of  another  sovereign,  is  something  which  no  other  coun¬ 
try  in  the  world  would  tolerate.”  “The  American  Judiciary,”  p.  104. 


ATTITUDE  OF  THE  COURTS  335 

of  the  early  part  of  the  eighteenth  century;  for  the 
“  Esprit  des  Lois  ”  was  first  published  in  1748.  And  yet 
a  most  cursory  glance  at  those  institutions  will  show 
that  the  English  judiciary  was  never  independent 
of  Parliament.  The  Act  of  Settlement  passed  in 
1701  which  provided  for  what  is  known  as  the  judicial 
tenure  made  the  judges  independent  only  of  the  crown, 
since  it  enacted  that  judges  might  be  removed  by 
the  crown  only  upon  the  address  of  both  houses  of 
Parliament.  The  result  in  England  was  that  while 
the  judges  made  a  few  feeble  attempts  to  claim  the 
right  to  declare  void  acts  of  Parliament  on  the  ground 
that  they  were  violative  of  the  judicial  idea  of  natural 
right,  they  soon  abandoned  such  attempts  and  for 
more  than  a  century  no  English  judge  has  dared  so 
much  as  to  hint  that  an  act  of  Parliament  does  not 
have  the  force  of  law. 

Under  the  influence  of  the  doctrine  of  judicial 
independence,  however,  we  gave  to  the  judiciary  in 
some  of  our  early  state  constitutions  a  tenure  more 
secure  than  that  accorded  to  English  judges.  Thus 
the  first  constitution  of  New  York  provided  that  the 
judges  should  hold  office  during  good  behavior  or 
until  they  attained  the  age  of  sixty  years,  subject 
only  to  removal  as  the  result  of  conviction  for  mal 
and  corrupt  conduct,  on  impeachment  proceedings, 
by  a  two-thirds  vote  of  the  court  of  impeachment, 
which  consisted  of  the  members  of  the  Senate  and  of 
the  higher  judicial  officers  themselves.  Such  also 
is  ordinarily  believed  to  be  the  tenure  given  to  the 
judges  of  the  United  States  courts  by  the  federal 
constitution. 

The  independent  position  thus  accorded  to  the 


336  SOCIAL  REFORM  AND  THE  CONSTITUTION 

judges  gave  them  the  opportunity  to  declare  with 
impunity  acts  of  the  legislature  unconstitutional. 
Of  this  opportunity  they  began  to  avail  quite  early 
in  the  history  of  the  country.  There  were  several 
reasons  which  caused  the  people  to  look  with  favor 
upon  the  assumption  by  the  courts  of  this  power. 
In  the  first  place,  the  country  had  just  emerged  from 
a  struggle  against  what  was  considered  to  be  the  exer¬ 
cise  of  arbitrary  power,  and  its  political  thinkers  had 
adopted  with  enthusiasm  the  theories  of  the  natural 
rights  of  man  and  the  social  compact,  both  formu¬ 
lated  as  a  protest  against  the  exercise  of  arbitrary 
power.  The  courts  were  regarded  by  the  people, 
largely  because  of  historical  reasons,  as  the  protectors 
both  of  these  rights  and  this  compact.  In  the  second 
place,  the  conflicting  relations  of  the  new  federal 
government  and  the  states  made  it  seem  necessary 
to  provide  a  method  for  solving  any  difference  of 
opinion  that  might  arise,  and  Article  VI  of  the  United 
States  constitution  provided  that  the  constitution 
and  laws  of  the  United  States  should  be  the  supreme 
law  of  the  land,  anything  in  the  laws  of  the  states  to 
the  contrary  notwithstanding.  This  article  when 
taken  together  with  the  clauses  of  the  judicial  article 
of  the  constitution  might  well  be  regarded  as  giving 
the  Supreme  Court  of  the  United  States  the  power 
to  declare  acts  of  the  state  legislatures  unconstitu¬ 
tional  from  the  point  of  view  of  the  federal  constitu¬ 
tion.  It  was,  however,  apparently  regarded  by  the 
federal  judges  to  authorize  them  as  well  to  consider 
whether  acts  of  Congress  were  violative  of  the  federal 
constitution.  The  first  expression  of  such  a  belief  upon 
their  part  was  made  in  1792,  when  the  judges  of  sev- 


ATTITUDE  OF  THE  COURTS 


337 


eral  of  the  circuit  courts  of  the  United  States  sent 
letters  to  President  Washington  indicating  that  in 
their  opinion  an  act  recently  passed  by  Congress  was 
unconstitutional.  In  one  of  these  they  say:  “To 
be  obliged  to  act  contrary  either  to  the  obvious  direc¬ 
tions  of  Congress,  or  to  a  constitutional  principle, 
in  our  judgment  equally  obvious,  excited  feelings 
in  us  which  we  hope  never  to  experience  again.”  In 
another,  that  “we  can  never  find  ourselves  in  a  more 
painful  situation. ” 1  Apparently  the  Supreme  Court 
took  the  same  view  of  judicial  power  as  early  as  1794, 
and  in  that  year  actually  declared  unconstitutional 
an  act  of  Congress.2  This  originally  rather  timid 
assertion  of  power,  supported  by  little  or  no  argu¬ 
ment,  was,  however,  changed  when  Marshall  came  to 
the  bench.  In  the  great  case  of  Marbury  v.  Madison,3 
decided  in  1803,  Marshall  takes  the  position  that  it  is 
one  of  the  necessary  corollaries  of  a  written  constitu¬ 
tion  that  the  courts  have  the  power  to  declare  acts 
of  the  legislature  void.  Since  1803  the  power  has  really 
not  been  questioned  in  the  Supreme  Court,  although 
the  decisions  of  that  body  in  particular  cases  have 
often  been  criticised  by  members  of  the  court.  The 
power  to  declare  acts  of  Congress  unconstitutional 
was  not,  however,  again  exercised  until  1864, 4  although 
the  right  to  use  the  power  was  claimed  from  time  to 
time. 

In  the  meantime  the  Supreme  Court  had  declared 
a  number  of  acts  of  state  legislatures  unconstitutional. 

1  Heyburn’s  Case,  2  Dali.  409,  note. 

2  United  States  v.  Yale  Todd,  note  to  United  States  v.  Ferreira, 

13  How.  52.  3  1  Cranch,  137. 

4  Gordon  v.  United  States,  2  Wall.  561,  117  U.  S.  697. 


338  SOCIAL  REFORM  AND  THE  CONSTITUTION 


The  first  instance  of  the  exercise  of  this  power  was  in 
1809  with  regard  to  an  act  of  the  legislature  of  Penn¬ 
sylvania.1  An  act  of  Georgia  was  declared  void  in 
1 8 10, 2  while  in  1819  the  acts  of  three  states  were  over¬ 
turned,  and  since  that  time  the  Supreme  Court  of 
the  United  States  has  had  little  compunction  in  exer¬ 
cising  this  power.  The  frequency  of  its  exercise  has 
naturally  been  increased  by  the  adoption  of  the  four¬ 
teenth  amendment  which  forbade  a  state  to  deprive 
any  person  of  his  life,  liberty,  or  property  without 
due  process  of  law. 

While  the  Supreme  Court  was,  by  declaring  acts 
of  state  legislatures  unconstitutional,  accustoming 
the  people  of  the  United  States  to  the  rather  novel 
idea  of  judicial  supremacy  over  the  legislature,  the 
state  courts  were  acting  along  the  same  lines  and 
on  account  of  the  more  detailed  provisions  of  the 
state  constitutions  were  called  upon  to  act  with  great 
frequency.  The  exercise  of  the  power  was,  however, 
not  assumed  by  the  state  courts  without  a  protest 
upon  the  part  of  the  legislatures.  In  Rhode  Island 
the  judges  were  summoned  before  that  body  to  ex¬ 
plain  their  action,  and  the  legislature  refused  to 
reelect  them,  Rhode  Island  being  one  of  the  few 
states  in  which  judges  owed  their  positions  to 
election  by  the  legislature.  In  Ohio  the  attempt 
was  made  to  impeach  judges  for  having  declared  an 
act  of  the  state  legislature  unconstitutional,  but  failed 
of  success  because  one  less  than  the  two- thirds  major¬ 
ity  necessary  to  convict  on  impeachment  was  secured. 
In  Georgia  as  late  as  1815  the  legislature  after  stating, 

1  United  States  v.  Peters,  5  Cranch,  115. 

2  Fletcher  v.  Peck,  6  Cranch,  87. 


ATTITUDE  OF  THE  COURTS 


339 


in  a  protest  against  what  it  regarded  as  a  usurpation 
of  power  upon  the  part  of  the  judges,  that  “the 
extraordinary  power  of  determining  upon  the  consti¬ 
tutionality  of  an  act  of  the  state  legislature,  if  yielded 
by  the  general  assembly,  whilst  it  is  not  given  by 
the  constitution  or  laws  of  the  state,  would  be  an 
abandonment  of  the  dearest  rights  and  liberties  of 
the  people,  which  we,  their  representatives,  are  bound 
to  guard  and  protect  inviolate,5’  goes  on  to  say :  “yet 
we  forbear  to  look  with  severity  on  the  past  in  conse¬ 
quence  of  judicial  precedents,  calculated  in  some 
measure  to  extenuate  the  conduct  of  the  judges  and 
hope  that  for  the  future  this  explicit  expression  of 
public  opinion  will  be  obeyed.55 1 

These  rather  sporadic  attempts  on  the  part  of  state 
legislatures  to  prevent  the  courts  from  exercising 
the  power  they  claimed  were  thus  unsuccessful, 
and  the  American  people  came  to  look  apparently 
with  approval  upon  the  action  of  the  judiciary. 
For  in  the  revisions  of  the  state  constitutions  in 
the  early  part  of  the  nineteenth  century  they  made 
no  attempt  to  curb  the  judicial  power.1 2  In  these 
constitutional  revisions  the  people  did,  however, 
exhibit  a  desire  to  subject  the  judges  to  a  greater 
popular  control  than  was  possible  where  they  were 
appointed  for  good  behavior.  Change  in  the  position 
of  the  federal  judiciary  was  impossible  on  account 
of  the  difficulty  of  amending  the  federal  constitution. 
But  in  1832  the  movement  for  an  elective  judiciary 

1  Baldwin,  “The  American  Judiciary,”  p.  112. 

2  See  opinion  of  Chief  Justice  Gibson,  in  Norris  v.  Clymer,  2  Pa. 
St.  281,  as  compared  with  his  dissenting  opinion  in  Eakin  v.  Raub, 
12  Serg.  &  Rawle,  330. 


340  SOCIAL  REFORM  AND  THE  CONSTITUTION 


with  a  shorter  term  than  for  good  behavior  began  in 
the  states,  when  Mississippi  provided  for  the  popular 
election  of  the  judiciary,  and  by  1905  thirty  three 
of  the  states  had  adopted  this  method.  In  some  of  the 
states,  however,  executive  appointment  of  the  judges 
still  remained  the  rule.  But  in  most  of  these  states, 
the  legislature  acting  with  the  executive  as,  e.g.,  in 
Massachusetts,  may  remove  judges  from  office  as  a 
result  of  a  mere  majority,  or  as  in  New  York  may  act 
alone  by  a  two-thirds  vote,  without  anything  in  the 
nature  of  an  impeachment  trial.  In  a  few  states  also, 
as  in  Vermont,  judges  are  to  be  elected  by  the  legis¬ 
lature  for  a  short  term,  such  as  one  or  two  years. 

The  kind  of  tenure  possessed  by  judges  seems,  how¬ 
ever,  to  have  had  little  effect  upon  the  exercise  of  the 
power  to  declare  acts  of  the  legislature  unconstitu¬ 
tional.  Even  in  Vermont,  where  their  position  has 
been  least  secure,  they  have  ventured  to  exercise 
the  power  and  have  done  so  with  impunity.  Indeed, 
it  may  be  said  that  of  recent  years  judges  are  exer¬ 
cising  their  power  with  greater  and  greater  frequency. 
A  condition  of  what  in  the  words  of  Mr.  Justice 
Clifford  of  the  United  States  Supreme  Court  may  be 
called  “  judicial  despotism”1  has  been  reached,  and  as 
we  have  seen,  acts  of  the  legislature  introducing  what 
would  seem  to  be  reforms  which  are  necessary  if 
our  law  is  to  be  in  accord  with  our  economic  conditions 
are  frequently  declared  unconstitutional. 

The  result  is  that  the  wisdom  of  according  judges 
the  power  which  they  are  now  exercising  is  being 
more  frequently  questioned  than  ever  before.  Legal 
periodicals  at  the  present  time  frequently  contain 

1  Supra ,  p.  294. 


ATTITUDE  OF  THE  COURTS 


341 


articles  which  are  subjecting  judicial  decisions  on 
constitutional  questions  to  a  searching  examination, 
public  speeches  denouncing  some  particular  judicial 
determination  are  becoming  more  and  more  common, 
while  finally  it  is  seriously  proposed  in  the  constitu¬ 
tion  provided  for  Arizona  and  as  an  amendment  to  the 
constitution  of  California  that  judges  be  made  subject 
to  the  operation  of  the  new  democratic  device  known 
as  the  recall,  which  permits  a  certain  percentage  of  the 
voters  to  demand  that  an  elective  officer  resubmit 
his  name  as  a  candidate  for  office  before  the  expira¬ 
tion  of  the  term  for  which  he  was  elected. 

It  may  therefore  be  apprehended  that  the  judges 
may  find  their  powers  seriously  limited  or  their  tenure 
changed,  unless  they  regard  the  function  which  they 
have  assumed  in  the  face  of  considerable  opposition 
as  one  towards  which  their  attitude  should  be  some¬ 
what  different  from  that  which  they  entertain  towards 
their  ordinary  judicial  duties.  Even  so  great  a  sup¬ 
porter  of  the  power  of  the  courts  to  declare  unconsti¬ 
tutional  acts  of  the  legislature  as  the  late  Professor 
Thayer  says :  — 

“What  really  took  place  in  adopting  our  theory  of  constitu¬ 
tional  law  was  this :  we  introduced  for  the  first  time  into  the  con¬ 
duct  of  government  through  its  great  departments  a  judicial 
sanction,  as  among  these  departments  —  not  full  and  complete, 
but  partial.  The  judges  were  allowed,  indirectly  and  in  a  degree, 
the  power  to  revise  the  action  of  other  departments  and  to  pro¬ 
nounce  it  null.  In  simple  truth,  while  this  is  a  mere  judicial 
function,  it  involves  owing  to  the  subject  matter  with  which  it 
deals,  taking  a  part,  a  secondary  part,  in  the  political  conduct  of 
government.  If  that  be  so,  then  the  judges  must  apply  methods 
and  principles  that  befit  their  task.”  1 

1  Thayer,  “Legal  Essays,”  p.  32. 


342  SOCIAL  REFORM  AND  THE  CONSTITUTION 


The  principle  of  stare  decisis  which  has  such  force 
with  American  courts  should  be  given  a  somewhat 
limited  application.  A  decision  of  a  concrete  point 
under  a  certain  set  of  economic  conditions  should 
not  be  regarded  as  having  controlling  force  under 
economic  conditions  which  have  through  the  process 
of  time  been  greatly  changed.  Principles  of  law 
which  have  been  developed  in  certain  geographical 
conditions  should  not  be  applied  without  modifica¬ 
tion  in  geographical  conditions  which  are  quite  dif¬ 
ferent  in  character.  Such  considerations  have  peculiar 
force  with  regard  to  such  general  constitutional  limi¬ 
tations  as  those  providing  that  life,  liberty,  or  property 
shall  not  be  taken  without  due  process  of  law,  else 
a  narrow  view  due  to  the  peculiar  conditions  existing 
at  the  time  it  was  adopted  will  be  given  permanently  to 
a  provision  which  was  properly  framed  in  very  general 
terms. 

That  the  courts  have  in  many  cases  adopted  this 
method  of  constitutional  interpretation  may  not 
be  denied.  The  Supreme  Court  of  the  United  States, 
for  example,  had  this  idea  in  mind  when  it  reversed 
its  decision  that  the  admiralty  jurisdiction  of  the 
federal  courts  extended  only  to  tidal  waters  and 
adopted  the  view  that  this  jurisdiction  embraces  the 
great  rivers  and  lakes  of  the  country.  The  same  body 
applied  this  principle  also  when  it  came  to  the  conclu¬ 
sion  that  the  powers  of  taxation  and  eminent  domain 
may  in  arid,  mining,  swampy,  and  mountainous  dis¬ 
tricts  be  used  for  irrigation,  water  power,  mining, 
and  drainage  purposes.  But  there  is  reason  to  believe 
that  as  yet  the  courts  of  this  country  generally, 
including  even  the  Supreme  Court  itself,  have  not 


ATTITUDE  OF  THE  COURTS 


343 


been  sufficiently  convinced  of  the  changing  character 
of  political,  social,  and  economic  conditions  and  of 
the  necessity  of  corresponding  flexibility  in  our  law. 

If  this  is  the  case,  the  question  naturally  arises, 
what  can  be  done  to  induce  the  courts  to  adopt  more 
liberal  views  as  to  constitutional  intrepretation,  which 
will  be  less  radical  than  the  recall  or  other  similar 
methods  of  curbing  judicial  power,  but  which  at  the 
same  time  will  insure  the  development  of  our  constitu¬ 
tional  law  in  a  manner  both  progressive  and  orderly. 

Most  of  the  commentators  on  the  constitution 
of  the  United  State  delight  to  point  out  that  the 
judicial  authority  as  organized  in  that  instrument 
is  the  weakest  of  the  three  authorities  for  which 
provision  is  therein  made.  Accustomed  as  we  are 
to  seeing  the  federal  courts  at  one  time  declaring  the 
acts  of  Congress  unconstitutional,  at  another  enjoining 
the  highest  officers  of  the  states  from  enforcing  a  state 
statute,  we  are  apt  to  think  of  them  as  the  most  power¬ 
ful  and  influential  organs  in  our  system  of  government. 
And  we  are  right  in  our  conclusions  if  we  consider 
merely  the  provisions  of  the  positive  law  as  it  now 
exists.  For  the  federal  courts  may  and  often  do  ulti¬ 
mately  determine  for  good  or  for  evil  the  extent  of 
power  which  we  as  an  organized  political  community 
may  exercise  either  in  our  central  or  our  local  organ¬ 
izations.  But,  if  we  cast  our  glance  from  that  positive 
law,  as  it  now  exists,  to  the  provisions  of  the  federal 
constitution,  we  can  hardly  fail  to  realize  that  the 
commentators  are  right  and  that  almost  all  of  the 
great  powers  which  the  federal  courts  possess  are 
theirs  only  because  of  the  fact  that  their  exercise 
of  these  powers  has  as  a  whole  been  satisfactory 


344  SOCIAL  REFORM  AND  THE  CONSTITUTION 


to  the  people  of  the  United  States.  For  the  extent 
of  these  powers  is  ultimately  determined  by  Congress, 
which  is  the  representative  of  the  people. 

The  judicial  article  of  the  constitution  1  provides 
that  the  judicial  power  of  the  United  States  shall 
be  vested  in  one  Supreme  Court  and  such  inferior 
courts  as  the  Congress  may  from  time  to  time  ordain 
and  establish.  The  Supreme  Court  is  the  only  court 
which  is  provided  for  in  the  constitution  and  whose 
existence  is  not  dependent  on  the  will  of  Congress, 
All  the  other  courts  of  the  United  States  are  dependent 
not  merely  for  the  powers  which  they  exercise,  but 
also  for  their  very  being,  upon  legislation.  Once  in 
the  history  of  the  country  Congress  abolished  the 
inferior  courts,  and  many  and  many  a  time  has  passed 
acts  limiting  their  jurisdiction  and  changing  their 
organization,  which  have  been  upheld  as  constitutional 
by  the  Supreme  Court.  Almost  the  only  things 
which  Congress  may  not  do  with  regard  to  the  inferior 
federal  courts  are  to  remove  or  provide  for  the  removal 
from  office  of  the  judges  thereof  except  through  the 
method  of  impeachment  and  to  diminish  their  com¬ 
pensation  during  their  continuance  in  office.  The 
tenure  and  compensation  of  the  judges  of  the  Supreme 
Court  are  accorded  the  same  protection  by  the  con¬ 
stitution.2 

1  Article  in. 

2  It  was  once  claimed  in  Congress  that  that  body  had  the  right  to 
remove  the  United  States  judges  for  misbehavior,  since  the  judicial 
article  merely  says  that  the  judges  shall  hold  during  good  behavior 
and  the  provision  of  the  constitution  relative  to  impeachment  applies, 
not  to  the  judges  by  name  but  to  all  civil  officers.  See  Speech  of 
Senator  Stone  made  January  13,  1802.  Eliot’s  “Debates,”  Vol.  IV, 
pp.  443-444- 


ATTITUDE  OF  THE  COURTS 


345 


The  position  of  the  Supreme  Court  is  somewhat 
but  not  much  stronger  than  that  of  the  inferior  federal 
courts.  It  is  of  course  true  that  the  existence  of  the 
Supreme  Court  is  provided  for  by  the  constitution, 
but  the  number  of  its  members  is  to  be  determined 
by  Congress,  and  appointment  to  fill  vacancies  in  its 
membership  is  dependent  upon  the  concurrent  action 
of  the  President  and  Senate.  It  is  also  true  that  its 
original  jurisdiction  is  fixed  beyond  the  possibility 
of  change  by  the  constitution,  but  this  jurisdiction 
is  comparatively  unimportant,  relating  only  to  cases 
affecting  ambassadors,  other  public  ministers  and  con¬ 
suls,  and  those  in  which  a  state  is  a  party,  while  its 
appellate  jurisdiction  is  subject  to  such  exceptions 
and  is  to  be  exercised  under  such  regulations  as 
Congress  shall  make. 

Congress  acting  with  the  President  may,  by  reducing 
the  number  of  its  judges  and  by  the  refusal  to  fill 
vacancies  in  its  membership  as  they  occur,  condemn 
the  Supreme  Court  to  a  slow  if  painless  death,  or  while 
permitting  it  to  remain  in  a  formal  state  of  existence 
may  deprive  it  of  all  those  powers  whose  exercise 
has  made  the  court  what  it  now  is.  Nor  is  the  state¬ 
ment  which  has  just  been  made  a  statement  of  the 
merely  theoretical  powers  of  Congress.  It  has  been 
said  that  once  in  our  history  Congress  destroyed  the 
inferior  courts.  It  may  be  added  that  once  also  in 
our  history  Congress  deprived  the  Supreme  Court  of 
part  of  its  appellate  jurisdiction,  fearing  that  it  was 
about  to  declare  unconstitutional  an  act  of  Congress, 
and  the  court  held  not  only  that  this  action  was 
within  the  constitutional  powers  of  Congress,  but  that 
the  act  deprived  it  of  jurisdiction  to  decide  a  case 


346  SOCIAL  REFORM  AND  THE  CONSTITUTION 


which  had  been  argued  before  it  and  was  at  the  time 
under  advisement.1  It  was  known  to  the  court  why 
Congress  had  taken  this  action,  but  in  its  opinion 
it  said:  “We  are  not  at  liberty  to  inquire  into  the 
motives  of  the  legislature.  We  can  only  examine 
into  its  power  under  the  constitution ;  and  the  power 
to  make  exceptions  to  the  appellate  jurisdiction  is 
given  by  express  words.” 2  At  another  time  in  the 
history  of  the  country  the  President  made  such  use 
of  his  power  to  fill  vacancies  in  the  membership  of 
the  Supreme  Court  that  a  case  in  which  an  act  of 
Congress  had  been  declared  by  the  court  unconsti¬ 
tutional  was  reversed  and  the  view  finally  adopted 
into  our  law  that  Congress  had  the  right  to  make  the 
notes  of  the  United  States  legal  tender  in  the  pay¬ 
ment  of  debts  contracted  before  the  Legal  Tender 
act  was  passed.3 

These  rather  dramatic  and  exceptional  episodes  in 
the  history  of  the  court  occurred,  as  is  well  known, 
during  times  of  great  political  excitement,  and  on  that 
account  may  not  be  regarded  as  indicating  anything 
more  than  the  extent  of  the  constitutional  power  of 
Congress  and  of  the  influence  of  the  President  upon 
the  court.  In  addition  to  them,  however,  there  are 
almost  numberless  statutes  passed  by  Congress  from 

1  Ex  parte  McArdle,  7  Wall.  506. 

2  See  Willoughby,  “The  Constitutional  Law  of  the  United  States,”  4 
p.  976. 

3  In  Hepburn  v.  Griswold,  8  Wall.  603,  decided  in  1869,  the  court 
by  a  vote  of  five  to  three,  one  judgeship  being  vacant,  held  the  Legal 
Tender  act  unconstitutional.  In  The  Legal  Tender  Cases,  12  Wall. 
457,  decided  in  1870,  the  court  by  a  vote  of  five  to  four,  the  vacancy 
having  been  filled  in  the  meantime,  as  well  as  another  vacancy  due 
to  the  retirement  of  Mr.  Justice  Grier,  held  the  act  was  constitu¬ 
tional. 


ATTITUDE  OF  THE  COURTS 


347 


the  very  beginning  of  its  history  which  have  imposed 
limitations  either  directly  or  indirectly  upon  the  appel¬ 
late  jurisdiction  of  the  Supreme  Court.  Among  others 
are  the  acts  1  limiting  the  appellate  jurisdiction  to  cases 
in  which  the  matter  in  controversy  exceeds  one  thou¬ 
sand  dollars  and  costs  and  where  the  decisions  of  the 
circuit  courts  of  appeal  is  not  made  final,  with  cer¬ 
tain  enumerated  exceptions ;  and  also,  an  act  limiting 
the  appellate  jurisdiction  in  admiralty  cases  to  ques¬ 
tions  of  law  although  the  constitution  permits  the 
appeal,  in  case  no  action  is  taken  by  Congress,  in 
all  cases,  and  particularly  provides  for  it  in  questions 
of  fact  as  well  as  of  law. 

These  limitations  of  the  jurisdiction  of  the  United 
States  courts  by  act  of  Congress  have  always  been 
upheld  by  the  Supreme  Court.2  In  the  Francis 
Wright  the  court  in  deciding  that  Congress  may  limit 
the  appellate  jurisdiction  to  questions  of  law  said :  — 

“What  those  powers  (the  appellate  powers)  shall  be,  and  to 
what  extent  they  shall  be  exercised,  are  and  always  have  been 
proper  subjects  of  legislative  control.  Authority  to  limit  the 
jurisdiction  necessarily  carries  with  it  authority  to  limit  the  use 
of  the  jurisdiction.  Not  only  may  whole  classes  of  cases  be 
kept  out  of  the  jurisdiction  altogether,  but  particular  classes  of 
questions  may  be  subjected  to  re-examination  and  review  while 
others  are  not.  .  .  .  The  general  power  to  regulate  implies  the 
power  to  regulate  in  all  things.”3 

1  26  Stat.  at  Large,  826,  Chap.  517;  29  Stat.  at  Large,  492,  Chap. 

68. 

2  See  Ex  parte  McArdle,  7  Wall.  506;  The  Francis  Wright,  106 
U.  S.  381. 

3  As  to  the  power  of  Congress  over  the  jurisdiction  of  the  United 
States  courts  see  remarks  of  Mr.  Justice  Daniel  in  Cary  v.  Curtis 
3  How.  236.  He  says:  “The  judicial  power  of  the  United  States, 
although  it  has  its  origin  in  the  constitution,  is  (except  in  enumerated 


348  SOCIAL  REFORM  AND  THE  CONSTITUTION 


It  is  interesting  to  ask  the  question  whether  Con¬ 
gress,  in  the  exercise  of  its  power  to  regulate  the  juris¬ 
diction  of  the  federal  courts  in  general,  and  the  appel¬ 
late  jurisdiction  of  the  Supreme  Court  in  particular, 
may  provide  that  that  jurisdiction  shall  not  include 
the  determination  of  the  question  of  law  whether  an 
act  of  Congress  is  constitutional.  It  is  true  that  the 
present  judiciary  act  specifically  provides  that  the 
appellate  jurisdiction  of  the  Supreme  Court  shall 
include  “any  case  in  which  the  constitutionality 
of  any  law  of  the  United  States  ...  is  drawn  in 
question.”  But  this  may  be  regarded  not  as  a  grant 
of  power  but  as  a  declaration  of  an  existing  rule  of 
constitutional  law.  It  was  not  contained  in  the  origi¬ 
nal  Judiciary  Act.  Its  absence  from  that  act,  how¬ 
ever,  has  no  significance,  as  it  had  not  been  decided 
at  the  time  of  the  passage  of  that  act  that  the  courts 
possessed  such  a  power.  It  is  also  true  that  the  dictum 
which  has  been  quoted  at  length  from  The  Francis 
Wright,  is  broad  enough  to  justify  such  action  on  the 
part  of  Congress  so  far  as  concerns  the  appellate 
jurisdiction  of  the  Supreme  Court,  but  being  merely 
dictum  it  naturally  has  not  the  force  of  law,  and  even 
as  dictum  it  was  made  with  regard  to  a  totally  dif¬ 
ferent  question,  viz.  whether  Congress  could  dis¬ 
tinguish  between  questions  of  fact  and  law  in  defining 
the  appellate  jurisdiction  of  the  court  in  admiralty 
cases.  It  is  to  be  remembered  also  that  the  distinc¬ 
tion  between  questions  of  law  and  questions  of  fact 
had  for  a  long  time  been  made  in  other  parts  of  the 

instances,  applicable  exclusively  to  this  court)  dependent  for  its 
distribution  and  organization  and  for  the  modes  of  its  exercise,  en¬ 
tirely  upon  the  action  of  Congress.” 


ATTITUDE  OF  THE  COURTS 


349 


law.  At  the  same  time,  the  case  itself  is  authority 
for  the  principle  that  Congress  may  limit  the  questions 
which  may  be  raised  and  determined  on  appeal  to  the 
Supreme  Court. 

While  the  federal  courts  are  in  a  weak  position,  the 
state  courts  are  usually  recognized  in  the  state  con¬ 
stitutions.  These  instruments  often  not  merely  pro¬ 
vide  for  the  existence  of  the  courts  but  also  regu¬ 
late  in  considerable  detail  their  jurisdiction  which 
may  not  under  these  conditions  be  regulated  by  the 
state  legislatures.  But  while  the  powers  of  the  state 
courts  are  thus  protected  against  legislative  curtail¬ 
ment  it  must  be  remembered  that  state  constitutions 
are,  as  has  been  pointed  out,  comparatively  easy  of 
amendment.  Furthermore,  in  most  of  the  states 
the  tenure  of  the  judges  is  quite  different  from  that 
of  the  judges  of  the  federal  courts.  While  the  latter 
are  believed  to  hold  during  good  behavior  subject  to 
removal  only  as  the  result  of  a  conviction  after  a  regu¬ 
lar  impeachment  trial,  in  a  number  of  the  states  the 
judges  may,  as  has  been  shown,  be  removed  by  the 
legislature  or  the  legislature  and  the  executive,  some¬ 
times  after  a  hearing  as  in  New  York,  and  sometimes 
with  no  formality  at  all  as  in  Massachusetts. 

The  present  constitution  of  New  York  thus  provides 
that  the  removal  of  judges  by  the  legislature  shall 
be  for  cause  and  after  an  opportunity  to  be  heard. 
The  question  arises  as  to  whether  such  a  provision 
provides  for  a  regular  judicial  trial.  The  Court  of 
Appeals  has  held  not,  in  the  case  of  similar  provisions 
with  regard  to  the  removal  of  other  than  judicial 
officers.1  The  further  question  arises  as  to  whether 
1  In  the  matter  of  Guden,  171  N.  Y.  529. 


350  SOCIAL  REFORM  AND  THE  CONSTITUTION 


the  decision  by  a  judge  that  an  act  of  the  legislature 
is  unconstitutional  is  a  sufficient  cause  for  removal 
under  such  constitutional  provisions.  It  must  cer¬ 
tainly  be  admitted  that,  in  1846,  when  the  article  was 
inserted  in  the  constitution  of  the  state  of  New  York, 
such  action  would  probably  not  have  been  so  considered. 
But  it  is  a  matter  of  history,  as  has  been  shown,  that 
in  the  early  part  of  the  nineteenth  century  before  the 
legislatures  had  reconciled  themselves  to  the  exercise 
of  this  power  by  the  courts,  they  both  either  actually 
impeached  or  attempted  to  remove  judges  and  in  one 
or  two  cases  actually  refused  to  elect  judges  who  had 
declared  acts  of  the  legislature  to  be  unconstitutional. 
There  is,  therefore,  considerable  reason  for  believing 
that  the  requirement  of  cause  for  removal  could  be 
construed  as  having  been  complied  with  where  the 
attempt  was  made  by  the  legislature  to  remove  a 
judge  who  had  declared  an  act  of  that  body  to  be 
unconstitutional. 

However  that  may  be,  it  is  certainly  within  the 
power  of  the  people  of  a  state  to  provide  that  their 
judges  may  be  removed  by  the  legislature.  This 
is  historically  the  tenure  which  judges  have  had  for 
centuries  in  England,  and  had  in  the  early  part  of  the 
nineteenth  century  in  this  country  and,  as  has  been 
shown,  is  the  tenure  of  some  American  judges  at  the 
present  time.  The  fact  that  American  judges  have, 
notwithstanding  the  insecurity  of  their  tenure,  ven¬ 
tured  at  times  to  declare  unconstitutional  acts  of  the 
state  legislature  and  have  done  so  with  impunity 
would  lead  to  the  conclusion  that  this  extraordinary 
power  which  American  judges  possess  and  exercise  is 
theirs  after  all  only  because  the  American  people 


ATTITUDE  OF  THE  COURTS 


351 


have  thought  on  the  whole  that  it  was  best  that  they 
should  have  it.  We  may  also  conclude  that  if  the 
American  people  change  their  mind  as  to  the  wisdom 
of  such  a  principle,  it  would  be  comparatively  easy 
in  the  case  of  the  state  judges  by  changing  their 
tenure  and  by  making  them  more  dependent  upon 
the  legislature  to  provide  a  sanction  by  means  of 
which  any  improper  interference  with  legislative  ac¬ 
tivity  and  a  too  insistent  opposition  to  change  might 
be  discouraged.1 

If  the  constitutional  law  of  the  states  of  the  Union 
were  so  amended  as  to  permit  the  legislature  to  remove 
judges  who  declared  acts  of  the  legislature  uncon¬ 
stitutional,  it  would  be  possible  to  provide  that  removal 
for  such  cause  should  not  disqualify  a  judge  so  removed 
for  the  office  from  which  he  had  been  removed.  For 
the  removal  would  not  carry  with  it  any  stigma  of 
misconduct.  In  such  a  case  a  judge  if  reelected  by 
the  people,  where  popular  election  of  judges  was  the 
rule,  might  properly  consider  that  his  views  as  to  the 
constitutionality  of  legislative  action  were  the  views 
of  the  people  who  through  such  a  method  of  referen¬ 
dum  would  be  called  upon  to  give  the  final  decision 
on  these  constitutional  questions.  While  such  a 
method  of  settling  these  problems  would  naturally 
involve  a  violent  break  with  the  traditions  of  the 
immediate  past,  it  is  submitted  that  it  would  be  an 
orderly  constitutional  method  of  action  based  upon 
the  principle  applied  by  the  people,  from  whom  we 

1  See  Baldwin,  “The  American  Judiciary,”  Chaps.  VII  and  XXII, 
for  an  interesting  description  of  the  development  of  the  idea  that 
judges  may  declare  unconstitutional  legislative  acts,  and  of  the  tenure 
of  judicial  office. 


352  SOCIAL  REFORM  AND  THE  CONSTITUTION 


have  received  our  law  and  political  institutions,  in 
the  settlement  of  the  most  important  constitutional 
problems.  Such  a  method  would  probably  be  pref¬ 
erable  to  the  application  of  the  recall  to  judges.  For 
the  removal  by  the  legislature  would  commonly  be 
preceded  by  a  more  intelligent  consideration  of  the 
question  than  would  probably  be  possible  in  the  case 
of  the  recall. 

Finally,  it  is  possible,  without  going  so  far  as  any 
of  the  methods  suggested  would  necessitate,  to  pro¬ 
vide  that  no  court  shall  decide  an  act  of  a  legislative 
body  to  be  unconstitutional,  unless  the  decision  is 
reached  by  the  unanimous  action  of  the  members 
of  the  court  or  by  the  action  of  any  majority  that 
might  be  determined  upon.  In  the  case  of  the  state 
courts  such  provision  could  be  adopted  through  the 
amendment  of  the  state  constitution.  Such  a  pro¬ 
vision  would  also  really  bring  it  about  that  our  practice 
would  accord  with  our  theory,  which  is  that  in  order 
that  an  act  of  the  legislature  be  declared  void  by  a 
court  its  unconstitutionality,  like  the  guilt  of  a  person 
charged  with  crime,  must  be  clear  beyond  a  reason¬ 
able  doubt.  Judge  Baldwin  says  in  referring  to  this 
theory  of  constitutional  law  :  — 

“As  the  judgments  declaring  a  statute  inconsistent  with  the 
constitution  are  often  rendered  by  a  divided  court,  this  position 
seems  practically  untenable.  The  majority  must  concede  that 
there  is  a  reasonable  doubt  whether  the  statute  may  be  consist¬ 
ent  with  the  constitution,  since  some  of  their  associates  either 
must  have  such  a  doubt,  or  go  further  and  hold  that  there  is  no 
inconsistency  between  the  two  documents.”1 

But  it  is  well  to  consider  whether  such  a  provision 
1  The  American  Judiciary,”  p.  103. 


ATTITUDE  OF  THE  COURTS 


353 


could  be  incorporated  into  the  law  through  mere 
legislative  action.  For  because  of  the  practical  im¬ 
possibility  of  amending  the  federal  constitution  the 
only  way  in  which  such  a  principle  could  probably 
be  introduced  into  the  constitutional  law  of  the 
United  States  national  government  would  be  through 
Congressional  legislation. 

We  must  start  our  discussion  of  this  question  by 
recalling  to  mind  certain  fundamental  principles  of 
constitutional  law.  One  of  these  is  that  in  the  absence 
of  constitutional  limitation  the  legislature  has  plenary 
power  to  organize  the  government.  This  power  in 
the  case  of  Congress  is  somewhat  less  than  in  the  case 
of  a  state  legislature,  since  the  former  is,  while  the 
latter  is  not,  an  authority  of  enumerated  powers. 
It  follows  from  the  application  of  this  principle  that 
the  legislature  may  organize  the  courts  where  their 
organization  is  not  provided  for  in  the  constitution, 
and  where  the  measures  taken  by  the  legislature  do 
not  involve  the  exercise  of  judicial  power  or  interfere 
with  the  independence  of  .the  courts,  for  which  pro¬ 
vision  is  made  at  least  in  general  terms  by  all  Ameri¬ 
can  constitutions. 

It  has  been  seen  that  the  federal  constitution  makes 
provision  for  one  Supreme  Court,  and  for  inferior 
courts  to  be  established  by  Congress,  and  it  may 
be  added  that  the  constitution  of  the  United  States 
vests  the  judicial  power  of  the  United  States  in  these 
bodies,  and  thus  impliedly  forbids  authorities  not 
courts  to  exercise  such  judicial  power.  Congress, 
however,  from  the  beginning  has  had  and  has  exer¬ 
cised  the  power  to  organize  the  courts  of  the  United 
States.  Thus,  in  1789  by  the  judiciary  act  it  provided 


354  SOCIAL  REFORM  AND  THE  CONSTITUTION 

that  the  Supreme  Court  should  be  composed  of  six 
judges  and  that  four  of  these  should  constitute  a 
quorum  of  the  court.  The  judiciary  act  recently 
passed  by  Congress  provides  that  six  shall  consti¬ 
tute  a  quorum.  The  constitutionality  of  such  action 
on  the  part  of  Congress  has  apparently  not  been 
doubted,  and  for  that  reason  we  have  no  decision  by 
the  Supreme  Court  upon  the  question.  The  court 
has,  however,  for  a  long  time  followed  the  practice 
of  refusing  to  render  a  decision  upon  an  important 
constitutional  question  in  which  the  concurrence  of 
a  majority  of  its  total  membership  had  not  been 
secured.  This  practice  originated,  it  is  said,  in  the 
refusal  of  a  state  court  to  recognize  as  binding  a  deci¬ 
sion  of  the  Supreme  Court  concurred  in  by  less  than 
a  majority  of  its  total  membership.1 

The  precise  question  has,  however,  come  up  and 
been  decided  in  New  York.  The  constitution  of  the 
state  provided  that  the  Court  of  Appeals  should 
consist  of  eight  members,  and  the  legislature  pro¬ 
vided  that  a  quorum  should  consist  of  six.  The  court 
decided  that  a  decision  was  valid  where  four  of  the 
judges  concurred  and  three  dissented,  one  judge  being 
disqualified  for  interest.  Their  ground  for  this  deter¬ 
mination  was  that  the  conclusion  had  been  concurred 
in  by  a  majority  of  the  quorum  provided  by  the  legis¬ 
lature.  It  is  true  that  in  this  case  the  constitution 
expressly  authorized  the  legislature  to  organize  the 
court,  but  the  court  would  seem  to  be  of  the  opinion 

1  Baldwin,  “The  American  Judiciary,”  p.  118,  citing  Green  v. 
Biddle,  8  Wheaton,  i ;  Bodley  v.  Gaither,  3  Monroe  (Ky.)  57;  New 
York  v.  Miller,  8  Peters,  118;  see  also  Mayor  of  New  York  v.  Miin, 
9  Peters,  85. 


ATTITUDE  OF  THE  COURTS 


355 


that  the  legislature  would  have  had  the  power  to 
organize  the  court  in  the  absence  of  constitutional 
provision  to  that  effect.1 

Other  cases  recognizing  power  in  the  legislature  to 
organize  the  courts  even  where  the  measures  con¬ 
cerned  have  been  directed  to  the  methods  by  which 
courts  may  act  are  to  be  found  in  the  cases  which  have 
upheld  laws  abolishing  the  necessity  for  unanimity 
in  the  case  of  verdicts  of  juries.2  But  it  is  doubtful 
if  courts  would  regard  with  the  same  equanimity 
legislative  action  providing  for  unanimity  on  their 
part  in  constitutional  questions  which  they  have  evi¬ 
denced  in  the  case  of  the  abolition  of  the  necessity 
for  unanimity  on  the  part  of  juries.  There  are  a 
number  of  cases  in  which  courts  have  repulsed  with 
considerable  heat  attempts  on  the  part  of  legislatures 
to  dictate  to  them  the  methods  of  their  action.  Thus 
they  have  quite  commonly  denied  the  right  of  the 
legislature  to  provide  that  they  shall  hand  down 
written  opinions  in  all  cases.3 

Finally,  we  have  two  interesting  cases  where  an 
attempt  was  made  by  the  legislature  to  provide 
directly  or  indirectly  the  number  of  members  whose 
concurrence  should  be  necessary  to  a  valid  decision. 
In  both  cases  the  court  considered  the  action  of  the 
legislature  improper.  The  first  was  decided  in  New 

1  Oakley  v.  Aspinwall,  3  N.  Y.  547. 

2  This  was  held  to  be  proper  first  in  Hess  v.  White,  9  Utah,  61.  The 
constitutionality  of  such  action  was  questioned  in  later  cases,  but  the 
court  adhered  to  its  decision.  Smith  v.  Salt  Lake  City  R.  R.  Co.,  13 
Utah,  33. 

3  Vaughn  v.  Hark,  49  Ark.  160;  Houston  v.  Williams,  13  Cal.  24. 
In  this  last  case  the  opinion  is  written  by  Judge  Field,  afterwards  a 
member  of  the  Supreme  Court  of  the  United  States,  who  waxed  quite 
indignant  at  the  action  of  the  legislature. 


356  SOCIAL  REFORM  AND  THE  CONSTITUTION 


Jersey,  viz.  Olopp  v.  Ely.1  In  this  case  the  legislature 
provided  that  no  judgment  of  the  Supreme  Court 
should  be  reversed  by  the  court  unless  a  majority 
of  those  members  of  the  court  who  were  competent 
to  sit  on  the  hearing  and  decision  of  the  case  should 
concur  in  such  decision.  The  second  case  arose  in 
Tennessee.2  In  this  case  the  court  held  unconstitu¬ 
tional  a  statute  providing  that  where  the  Supreme 
Court  divided  evenly  on  the  question  of  the  consti¬ 
tutionality  of  an  act  of  the  legislature  the  act  should 
be  held  valid,  otherwise,  the  decision  of  the  lower 
court  should  be  affirmed. 

Although  these  cases  are  not  exactly  in  point  and 
cannot  thus  be  regarded  as  decisive  of  the  question 
at  issue,  at  the  same  time  they  are  indicative  of  the 
attitude  of  the  courts  towards  attempts  on  the  part 
of  the  legislature  to  exercise  a  control  over  their 
methods  of  arriving  at  a  decision,  notwithstanding 
their  acceptance  of  the  general  principle  that  the 
legislature  has  in  the  absence  of  constitutional  pro¬ 
vision  pretty  wide  control  over  judicial  organization. 

The  result  is  that  the  only  practical  method  of 
effectively  limiting  the  power  of  the  courts  to  declare 
unconstitutional  acts  of  the  legislature  is  through 
the  process  of  constitutional  amendment.  Such 
amendment  may  take  the  form  of  making  the  tenure 
of  judges  more  precarious  than  it  ordinarily  is  in  this 
country,  or,  of  increasing  the  number  of  judges  whose 
concurrence  shall  be  necessary  for  the  determination 
that  an  act  of  the  legislature  is  unconstitutional. 

1  27  N.  J.  L.,  3  Dutch.  622. 

2  It  was  reported  in  Legal  Reporter,  May,  1877,  and  is  referred  to  in 
the  opinion  in  Perkins  v.  Scales,  2  Lea,  612. 


ATTITUDE  OF  THE  COURTS 


357 


On  account  of  the  great  difficulty,  if  not  absolute 
impossibility,  of  amending  the  federal  constitution 
this  method  of  action  is  impracticable  in  the  case  of 
federal  courts.  All  that  can  be  done  in  the  case  of 
these  bodies  is  either  to  destroy  them,  which  Congress 
may  do  by  legislation  in  the  case  of  inferior  courts, 
or  to  limit  their  jurisdiction,  as  may  be  done  by  similar 
action  in  the  case  of  all  federal  courts.  Such  action 
would,  however,  involve  such  serious  consequences 
that  it  is  inconceivable.  The  abolition  of  the  lower 
federal  courts  would  have  the  effect  of  depriving 
individuals  of  all  judicial  remedies  in  a  number  of 
important  matters,  while  the  serious  limitation  of 
the  appellate  jurisdiction  of  the  Supreme  Court  would 
be  our  undoing  as  a  nation.  For  that  court  has 
probably  done  more  than  any  other  governmental 
authority  in  bringing  about  such  degree  of  national 
unity  as  we  now  enjoy. 

Our  only  recourse,  then,  in  the  case  of  the  federal 
courts  is  a  persistent  criticism  of  those  of  their  deci¬ 
sions  which  evince  a  tendency  to  regard  the  constitution 
as  a  document  to  be  given  the  same  meaning  at  all 
times  and  under  all  conditions,  and  which  fail  to  appre¬ 
ciate  that  the  courts  in  our  system  of  government  have 
been  accorded  a  really  political  function,  and  that,  with 
our  constitution  in  the  position  in  which  it  actually  is, 
courts  should  not  absolutely  block  change  although 
they  may  quite  properly  limit  the  rate  at  which  it  may 
proceed.  For  this  reason  the  proposition  which  was 
made  in  the  Senate  of  the  United  States  that  where 
the  Supreme  Court  had  by  a  mere  majority  vote  de¬ 
clared  an  act  of  Congress  to  be  unconstitutional,  Con¬ 
gress  should  not  feel  itself  precluded  from  later  on 


358  SOCIAL  REFORM  AND  THE  CONSTITUTION 

passing  an  act  similar  to  the  one  which  was  disallowed, 
is  one  which  might  well  be  discussed  with  even  greater 
fulness  than  was  accorded  to  it  in  the  session  of  1909. 
For,  as  was  then  pointed  out,  the  Supreme  Court  has 
on  more  than  one  occasion,  either  because  of  a  change 
in  its  membership  or  because  of  a  change  in  conditions, 
revised  opinions  which  it  has  deliberately  expressed.1 
Those  who  assert  that  by  criticism  of  the  Supreme 
Court  we  are  attacking  the  foundations  of  our  political 
system  forget  that  we  are  living  under  a  practically 
unamendable  constitution  and  that  unless  it  is  proper 
to  bring  popular  opinion  to  bear  upon  a  governmental 
authority  which  has  the  power  absolutely  to  prevent 
political  change  we  may  easily  be  tied  up  so  tight  in  the 
bonds  of  constitutional  limitation  that  either  develop¬ 
ment  will  cease,  and  political  death  ensue,  or  those 
bonds  will  be  broken  by  a  shock  that  may  at  the 
same  time  threaten  the  foundations  not  merely  of  our 
political  but  even  our  social  system. 

Criticism  of  the  federal  courts,  and  particularly 
of  the  Supreme  Court,  finally,  it  is  to  be  remembered, 
is  no  novel  thing  in  our  history.  When  the  Supreme 
Court  announced  in  Chisholm  v.  Georgia2  that  the 
federal  courts  could  entertain  a  private  suit  against 
a  state,  its  decision  “  created  such  a  shock  of  surprise 
throughout  the  country  ”  as  the  court  itself  later  rather 
euphemistically  said 3  that  Congress  immediately 
and  almost  unanimously  framed  an  amendment  to 
the  constitution,  later  adopted  by  the  states,  which 
not  only  took  away  such  jurisdiction  from  the  United 

1  For  an  interesting  discussion  of  this  question,  see  Bowman, 
“Congress  and  the  Supreme  Court,”  Pol.  Set.  Quar.,  Vol.  XXV,  p.  20. 

2  2  Dallas,  419.  3  Hans  v.  Louisiana,  134  U.  S.  1. 


ATTITUDE  OF  THE  COURTS 


359 


States  courts  in  the  future,  but  was  made  to  apply 
to  all  suits  of  that  character  then  before  the  courts. 
Both  Jefferson  and  Jackson  attacked  the  Supreme 
Court  and  particular  members  of  it  from  the 
vantage  ground  of  the  presidency,  and  sarcastically 
advised  that  body  to  execute  certain  of  the  de¬ 
cisions  which  it  had  made.  The  decision  of  the 
court  in  the  Dred  Scott  case  was  the  occasion  of  an 
attack  upon  it  by  Lincoln,  who  even  went  so  far  as 
to  assert  that  the  court  had  conspired  with  the  admin¬ 
istration  in  framing  a  collusive  suit,  and  led  to  the 
passage  of  hostile  resolutions  by  state  legislatures, 
one  of  which  formally  demanded  that  the  court  be 
reconstituted  so  that  it  would  represent  more  than  one 
section  of  the  country.1  Finally,  the  Supreme  Court 
was  bitterly  attacked  in  Congress  for  its  decision  in 
the  income  tax  cases.2  It  is  by  no  means  improb¬ 
able  that  this  severe,  persistent,  and  continuous  crit¬ 
icism  of  the  court  has  been  one  of  the  influences 
which  have  brought  it  about  that  the  court  has 
on  the  whole  been  reasonably  responsive  to  pub¬ 
lic  opinion.  In  these  days  of  rapid  economic  and 
social  change,  when  it  is  more  necessary  than  ever 
before  that  our  law  should  be  flexible  and  adapt 
itself  with  reasonable  celerity  to  the  changing  phe¬ 
nomena  of  life,  it  is  on  this  criticism  amply  justified 
by  our  history  that  we  must  rely  if  we  are  to  hope  for 
that  orderly  and  progressive  development  which  we 
regard  as  characteristic  of  modern  civilization. 

1  For  a  collection  of  instances  of  criticism  and  denunciation  by 
state  legislatures  of  the  decisions  of  the  Supreme  Court  see  Ames, 
“State  Documents  on  Federal  Relations,”  pp.  i,  93,  103,  105,  295, 
304. 

2  See  e.g.  Bowman,  “  Congress  and  the  Supreme  Court,”  Pol.  Sci. 
Quar.y  Vol.  XXV,  p.  20. 


INDEX 


Accident,  Insurance  against,  22. 

Admiralty,  clause  in  constitution,  re¬ 
lating  to,  40  ;  definition  of,  154 ; 
extent  of  jurisdiction  in,  40,  48, 
154;  when  exclusive,  154;  legis¬ 
lative  powers  of  Congress  as  to, 
S3  powers  of  states  as  to  law  of, 
154,  155 ;  maritime  lien,  155 ; 
proceedings  in  rem,  155. 

Administrative  law,  power  of  Con¬ 
gress  over,  200. 

Agreements  in  restraint  of  commerce, 

77: 

Ancient  lights,  doctrine  of,  258. 

Anti-peonage  law,  256. 

Anti-Trust  Act,  77. 

Assumption  of  risk,  rule  as  to,  21,  251. 

Australia,  federal  government  in,  12. 

Australasia,  government  aid  in,  26; 
government  ownership  in,  19; 
prevention  of  sweatshops  in,  23. 

Buildings,  regulation  of,  22,  259. 

Canada,  federal  government  in,  12. 

Canals,  navigable  waters,  when,  40. 

Cases,  arising  under  Constitution  and 
laws  of  the  United  States,  161. 

Cases  and  controversies,  158. 

Child  labor,  prohibition  of,  by  Con¬ 
gress,  84. 

Combinations  in  restraint  of  com¬ 
merce,  77. 

Commerce,  agreements  in  restraint  of, 
77 ;  Anti-Trust  Act,  77 ;  assump¬ 
tion  of  risk,  60;  combinations  in 
restraint  of,  77;  contributory 
negligence,  61 ;  corporations  for, 
100 ;  definition  of,  95  ;  employers’ 
liability,  61 ;  does  not  include  in¬ 
surance,  65;  nor  manufacturing, 


65;  interstate  act,  58;  liability 
of  carrier,  63 ;  manufacturing, 
when,  120;  other  than  transporta¬ 
tion,  75 ;  navigation  a  part  of,  37 ; 
police  regulation  of,  37 ;  power  of 
Congress  to  charter  corporations, 
100;  to  construct  highways,  72  ;  to 
create  railways,  113  ;  to  limit  right 
to  engage  in,  to  persons  licensed 
by  it,  153;  to  prohibit,  42,  80; 
to  prohibit  child  labor,  84 ;  to 
regulate,  35 ;  defined,  97 ;  exclu¬ 
sive,  37 ;  exercised  first  as  to  wa¬ 
ters,  ss ;  subject  to  5th  amendment 
to  Constitution,  89 ;  power  of 
states  to  prohibit  sale  of  articles, 
93 ;  pure  food  law,  83 ;  relation  of 
master  and  servant,  61 ;  restraint 
of,  77;  Safety- Appliances  Acts, 
59 ;  transportation  by  land,  a  part 
of,  38. 

Compensation,  21. 

Compulsory  arbitration,  25 3. 

Conciliation,  22. 

Congestion  of  population,  258. 

Congress,  powers  of,  33;  to  fix  ad¬ 
miralty  law,  153 ;  to  regulate 
commerce,  33  ;  of  legislation  under 
admiralty  clause,  156;  under 
judicial  article,  149;  over  ad¬ 
ministrative  law  of  states,  200 ; 
over  divorce,  135 ;  over  domestic 
relations,  195;  over  private  law, 
146;  over  probate  law,  197;  to 
regulate  relations  of  corporations 
created  by  it,  16 ;  to  determine  sys¬ 
tem  of  remedies  in  federal  courts, 
1 7 1 ;  over  real  property,  195. 

Constitution  of  United  States,  did  not 
fix  form  of  government  of  states, 
21 1 ;  difficulty  of  amending,  5; 


362 


INDEX 


form  of  government  under,  210; 
popular  elections  under,  210; 
purpose  of,  9 ;  reverence  of  people 
for,  9. 

Constitutions  of  states,  see  State 
constitutions. 

Contributory  negligence,  21,  251. 

Controversies  between  citizens  of 
different  states,  159. 

Corporations  created  by  Congress 
may  be  given  power  to  manufac¬ 
ture,  120;  not  subject  to  state 
control,  13 1,  137;  not  political 
agents  may  be  created  by  Congress, 
134- 

Co-servant  rule,  21,  251. 

Courts,  attitude  of,  towards  social 
reform,  329;  independence  of, 
343 ;  inherent  powers  of,  to  formu¬ 
late  law,  182 ;  power  of,  to  declare 
acts  of  legislature  unconstitutional, 
5,  335 ;  power  of  legislature  over, 
343 ;  tenure  of  judges,  335. 

Davie,  his  views  as  to  federal  courts, 
186. 

Dicey,  on  difficulty  of  amending 
Constitution  of  United  States,  5. 

Divorce,  power  of  Congress  over, 
195- 

Domestic  relations,  power  of  Congress 
over  law  of,  195. 

Due  process  of  law,  220. 

Education  by  correspondence  is  com¬ 
merce,  66. 

Electors,  qualifications  of,  fixed  by 
states,  21 1. 

Embargo  Act,  42. 

Eminent  domain,  proper  purposes 
for,  318;  propriety  of  purpose 
influenced  by  local  conditions,  312. 

Employers'  liability,  251. 

England,  taxation  of  increment  of 
land  value  in,  25. 

Equity  jurisprudence  of  United  States 
courts,  independent  of  states,  171. 

Evolution,  influence  of  theory  of,  on 
political  thought,  3. 

Excess  condemnation,  326. 


Factory  system,  influence  of,  1. 

Federal  common  law,  183. 

Federal  courts,  commercial  law  in, 
independent  of  states,  173;  doc¬ 
trine  of  estoppel  by  recital  in,  176; 
equity  jurisprudence  of,  indepen¬ 
dent  of  states,  17 1 ;  law  of  evi¬ 
dence  in,  171;  federal  common 
law  in,  183;  judicial  power  of, 
151;  jurisdiction  of,  203;  based 
on  character  of  case,  159;  on 
character  of  parties,  159;  when 
exclusive,  158;  exclusive  in  ad¬ 
miralty,  153;  over  controversies 
between  citizens  of  different  states, 
169;  to  which  United  States  is  a 
party,  165;  law  applied  in,  152; 
power  to  formulate  law,  172 ;  state 
law,  when  applied  in,  171,  174; 
system  of  remedies  in,  171;  re¬ 
moval  of  causes  to,  204. 

Federal  government,  recent  examples 
of,  12;  in  German  Empire,  12. 

Freeholders'  charters,  229. 

German  Empire,  federal  government 
in,  12;  insurance  for  old  age,  acci¬ 
dent,  and  sickness  in,  26 ;  power  to 
regulate  private  law  in,  146 ;  taxa¬ 
tion  of  increment  of  land  value  in, 

25. 

Government  aid,  25,  292*  exercise 
of  eminent  domain  for  purposes  of, 
318;  workingmen’s  dwellings,  317. 

Government  insurance,  236. 

Government  ownership,  18,  231 ;  as 
affected  by  contract  clause,  234. 

Government  regulation,  20,  242. 

Hamilton,  Alexander,  opinion  of,  as  to 
United  States  Bank,  101. 

Henry ,  Patrick,  views  of,  as  to  federal 
courts,  188. 

Hours  of  labor,  limitation  of,  21, 

245. 

House  of  Governors,  14. 

Industrial  revolution,  effect  of,  6. 

Initiative,  the,  224. 

Insurance,  by  government,  236; 


INDEX 


3  63 


against  accident,  2 1 ;  not  com¬ 
merce,  65. 

Interstate  commerce,  definition  of,  67, 
96. 

See  Commerce. 

Interstate  Commerce  Act,  58. 

Interstate  waters,  39. 

Iredell,  views,  of  as  to  federal  courts, 
185. 

Ireland,  regulation  of  rents  in,  24. 

Judges,  election  of,  339;  recall  of, 
341 ;  removal  of,  by  legislature, 
350.  See  Courts. 

Judicial  article  of  Constitution,  149. 

Judicial  power,  grant  of,  to  non-judi- 
cial  bodies,  218;  of  United  States, 
149;  cases  arising  under  Constitu¬ 
tion  and  laws  of  the  United  States, 
161;  cases  and  controversies,  158; 
when  exclusive,  158.  See  Federal 
Courts. 

Judicial  process,  220. 

Labor  disputes,  arbitration  of,  22,  253. 

Labor  regulation,  21,  242;  Anti- 

Trust  Laws,  258;  compulsory  arbi¬ 
tration,  25 3  ;  convict  labels,  248  ; 
employers’  liability,  252;  free¬ 
dom  of  contract,  250;  hours  of 
labor,  245 ;  in  interest  of  health 
and  safety,  243 ;  minimum  wage, 
257;  preference  to  union  labor, 
253  protection  of  weaker  classes, 
250,  258;  prevention  of  sweat¬ 
shops,  247  ;  tenement  house  work, 
244 ;  workmen's  compensation, 
252. 

Land,  regulation  of  use  of,  22;  incre¬ 
ment  of  value  of,  taxation  of,  25, 
279- 

Legislative  power,  delegation  of,  210. 

Local  self-government,  228. 

Lotteries,  power  of  Congress  to  pro¬ 
hibit,  83. 

Lottery  cases,  82. 

Manufacturing  not  commerce,  65 ; 
when  commerce,  78. 

Maritime  law,  sec  Admiralty  Law. 


Maritime  lien,  155. 

Marshall,  his  idea  of  commerce,  36; 
his  view  as  to  power  of  Congress  to 
create  corporations,  103  ;  as  to  the 
federal  courts,  188. 

Mason,  views  of,  as  to  federal  court 
189. 

Miners,  protection  of,  243. 

Minimum  wage,  257. 

Monopoly,  regulation  of,  283. 

Montesquieu,  his  theory  of  the  sepa¬ 
ration  of  governmental  powers,  16. 

Municipal  home  rule,  228. 

Natural  rights,  theory  of,  1 ;  influ¬ 
ence  of,  2. 

Navigation,  definition  of,  39 ;  no 
distinction  of  interstate  and  state, 
46,  69;  its  relation  to  commerce, 
50;  obstruction  of,  by  states,  40; 
power  of  Congress  to  regulate,  39, 
46.  155;  power  to  prohibit,  42; 
regulation  of  contractual  relations 
of  persons  engaged  in,  43. 

New  Zealand,  advances  to  working¬ 
men  in,  26 ;  government  aid  in, 
26;  government  insurance  in,  19; 
taxation  of  non-resident  lands  in, 
25 ;  taxation  progressive  in,  24 ; 
of  unimproved  value  of  land  in,  25. 

Oleomargarine  cases,  94. 

Outdoor  relief,  305. 

Pensions,  to  government  employees, 
300;  in  case  of  old  age,  sickness, 
etc.,  300 ;  power  of  Congress  to 
grant,  in  case  of  old  age,  etc.,  310. 

Peonage,  256. 

Pilotage  regulations,  41. 

Political  conditions,  influence  of,  on 
social  problems,  8. 

Political  problems  of  United  States,  6. 

Political  reform,  210. 

Political  society,  basis  of,  historical 
development,  3. 

Political  theories,  1. 

Port  regulations,  41. 

President,  election  of,  21 1. 

Prices,  regulation  of,  266. 


364 


INDEX 


Private  law,  tendency  of,  in  United 
States  to  become  less  uniform,  147  ; 
uniformity  of,  in  colonial  days, 
147. 

Probate  law ,  power  of  Congress  over, 
197- 

Property  affected  with  a  public  in¬ 
terest,  23,  264. 

Public  health,  powers  relating  to, 
219;  protection  of,  243. 

Public  safety,  protection  of,  243. 

Pure  food  Law,  83. 

Quarantine  regulations,  41. 

Quasi-judicial  power,  grant  of,  to 
administrative  officers,  219. 

Rates,  regulation  of,  23,  265 ;  as 
affected  by  contract  clause,  223 ; 
as  affected  by  due  process  of  law, 
271. 

Real  property  law,  power  of  Congress 
over,  195. 

Recall,  224,  227. 

Referendum,  224. 

Regulation  of  labor,  anti-peonage 
law,  256;  of  monopoly,  283;  by 
Congress,  284  ( see  Commerce) ; 
by  states,  287;  of  prices,  269;  of 
property,  258;  of  rates,  265;  of 
rents,  271 ;  by  taxation,  274. 

Rents,  regulation  of,  271;  in  Ire¬ 
land,  24. 

Republican  form  of  government,  224, 
233  ;  what  is,  determined  by  Con¬ 
gress,  225. 

Restraint  of  commerce,  77. 

Risk,  assumption  of,  21,  251. 

Safety  appliances,  21;  Acts,  59,  244. 

Sanitary  powers,  219. 

Seamen,  regulation  of  contracts  of, 
43,  49- 

Senators,  popular  election  of,  21 1. 

Separation  of  governmental  powers, 
in  American  law,  17,  210;  aban¬ 
donment  of,  214;  definition  of,  by 
Mr.  Justice  Miller,  212;  delegation 
of  legislative  power,  215;  grant 
of  judicial  power  to  non-judicial 


bodies,  218;  provided  for  by  Con¬ 
stitution,  210;  but  not  for  states, 
211. 

Social  classes  in  modern  times,  7. 

Social  compact,  theory  of,  1 ;  influ¬ 
ence  of,  2. 

Social  problems,  influence  on,  of 
political  conditions,  8;  in  United 
States,  8. 

States,  powers  of,  over  commerce,  4. 

State  constitutions,  easily  amended, 
30,  211. 

State,  Employment  bureaus,  240; 
Insurance,  237. 

Suffrage,  fixed  by  states,  21 1. 

Supreme  Court,  appeals  to,  28;  lib¬ 
erality  of,  330;  a  political  body, 
IS- 

Sweatshops,  prevention  of,  247. 

Taxation,  274;  of  incomes,  277;  of 
increment  of  land  values,  25,  279 ; 
progressive,  24,  281 ;  must  be  for 
a  public  purpose,  292 ;  power  to 
tax  power  to  destroy,  275  ;  proper 
purposes  of,  282 ;  propriety  of 
purpose  affected  by  climate,  295; 
uniformity  of,  280;  on  unim¬ 
proved  value  of  land,  278;  public 
purposes,  what  are,  295. 

Tenement  house  regulation,  259. 

Torrens  system,  constitutionality  of, 
220. 

Transportation,  power  of  Congress  to 
regulate,  54. 

Uniform  legislation  in  United  States, 
14. 

Union  labor,  preference  to,  253. 

United  States,  admiralty  jurisdiction 
of,  40;  bills  of  rights  in,  17;  cen¬ 
tralization  of  economic  conditions 
of,  10;  character  of  commerce  of, 
in  early  days,  36;  government 
ownership  in,  19;  navigation  in, 
36;  political  problems  of,  6;  social 
conditions  of,  in  eighteenth  cen¬ 
tury,  8;  social  problems  of,  18; 
uniform  legislation  in,  14;  Bank, 
101 ;  courts,  see  Federal  courts. 


INDEX 


Vessels,  inspection  of,  45 ;  license  of, 
42,  47* 

Waters,  interstate,  39. 

Wharfage  regulations,  41. 


Wilson,  views  of,  as  to  federal  courts, 
187. 

Workingmen’s  compensation,  21,  252  ; 
dwellings,  317. 


THE  following  pages  contain  advertisements  of  a 
few  of  the  Macmillan  books  on  kindred  subjects 


American  Social  Progress  Series 


EDITED  BY 

Professor  SAMUEL  McCUNE  LINDSAY,  Ph.D.,  LL.D. 

COLUMBIA  UNIVERSITY 


A  series  of  handbooks  for  the  student  and  general  reader,  giving  the 
results  of  the  newer  social  thought  and  of  recent  scientific  investiga¬ 
tions  of  the  facts  of  American  social  life  and  institutions.  Each  vol¬ 
ume  about  200  pages. 

i — The  New  Basis  of  Civilization.  By  Simon  N.  Patten,  Ph.D., 
LL.D.,  University  of  Pennsylvania.  Price,  $1.00  net. 

2  —  Standards  of  Public  Morality.  By  Arthur  Twining  Had¬ 

ley,  Ph.D.,  LL.D.,  President  of  Yale  University.  Price,  $1.00 
net. 

3  —  Misery  and  Its  Causes.  By  Edward  T.  Devine,  Ph.D.,  LL.D., 

Columbia  University.  Price,  $1.25  net. 

4  —  Government  Action  for  Social  Welfare.  By  Jeremiah  W. 

Jenks,  Ph.D.,  LL.D.,  Cornell  University.  Price,  $1.00  net. 

5  —  Social  Insurance.  A  Program  of  Social  Reform.  By  Henry 

Rogers  Seager,  Ph.D.,  Columbia  University.  Price,  $1.00 
net. 

6  —  The  Social  Basis  of  Religion.  By  Simon  N.  Patten,  Ph.D., 

LL.D.,  University  of  Pennsylvania.  Price,  $1.25  net. 

7  —  Social  Reform  and  the  Constitution.  By  Frank  J.  Goodnow, 

LL.D.,  Columbia  University. 


THE  MACMILLAN  COMPANY 


Publishers 


64-66  Fifth  Avenue 


New  York 


By  Miss  JANE  ADDAMS,  Hull-House,  Chicago 


Democracy  and  Social  Ethics 

i2mo,  cloth,  leather  back,  $ 1.25  net ;  by  mail,  $1.35 

“Its  pages  are  remarkably  —  we  were  about  to  say  refreshingly 
—  free  from  the  customary  academic  limitations  .  .  in  fact,  are 
the  result  of  actual  experience  in  hand  to  hand  contact  with  social 
problems.”  — Reviezu  of  Reviews. 

The  Newer  Ideals  of  Peace 

i2mo,  cloth,  leather  back,  $1.23  net;  by  mail,  $1.35 

“A  clean  and  consistent  setting  forth  of  the  utility  of  labor  as 
against  the  waste  of  war,  and  an  exposition  of  the  alteration  of 
standards  that  must  ensue  when  labor  and  the  spirit  of  militarism 
are  relegated  to  their  right  places  in  the  minds  of  men.” —  Chi¬ 
cago  Tribune. 

The  Spirit  of  Youth  in  the  City  Streets 

i2mo,  cloth,  $1.25  net;  by  mail,  $ 1.35 

A  protest  against  the  practice  of  every  large  city  of  turning  over 
to  commercialism  practically  all  the  provisions  for  public  recrea¬ 
tion,  leaving  it  possible  for  private  greed  to  starve  or  demoralize 
the  nature  of  youth. 

Twenty  Years  at  Hull-House 

III.,  dec.  cloth,  8vo,  $  2.50  net ;  by  mail,  $2.68 

Jane  Addams’s  work  at  Hull- House  is  known  throughout  the  civil¬ 
ized  world.  In  the  present  volume  she  tells  of  her  endeavors  and 
of  their  success  —  of  the  beginning  of  Hull-House,  of  its  growth 
and  its  present  influence.  For  every  one  at  all  interested  in  the 
improvement  of  our  cities,  in  the  moral  education  of  those  who 
are  forced  to  spend  much  of  their  time  on  the  streets  or  in  cheap 
places  of  amusement  —  “Twenty  Years  at  Hull-House”  will  be  a 
volume  of  more  than  ordinary  interest  and  value. 


THE  MACMILLAN  COMPANY 

Publishers  64-66  Fifth  Avenue  New  York 


BOOKS  OF  RELATED  INTEREST 


On  City  Government 

The  American  City 

By  DELOS  F.  WILCOX,  Ph.D. 

“  In  the  ‘  American  City  ’  Dr.  Wilcox  .  .  .  has  written  a  book  that 
every  thoughtful  citizen  should  read.  The  problems  of  the  street, 
the  tenement,  public  utilities,  civic  education,  the  three  deadly 
vices,  municipal  revenue  and  municipal  debt,  with  all  their  related 
and  subsidiary  problems,  are  clearly  and  fully  considered.”  — 
Pittsburgh  Gazette. 

6  -f-  423  pages,  i2tno,  cloth,  leather  hack,  $ 1.25  net.  Citizens'  Library 

Great  American  Cities 

Their  Problems  and  Their  Government 

By  DELOS  F.  WILCOX,  Chief  of  the  Bureau  of  Franchises, 
of  the  Public  Service  Commission  for  the  first  District,  New 
York 

A  detailed  account  of  present  conditions  in  the  half-dozen  largest 
cities  of  the  country,  including  Chicago. 

Half  leather,  i2mo,  $ 1.25  net 

On  Industrial  Legislation 

Some  Ethical  Gains  through  Legislation 

By  Mrs.  FLORENCE  KELLEY 

The  book  has  grown  out  of  the  author’s  experience  as  Chief  In¬ 
spector  of  Factories  in  Illinois  from  1893  to  1897,  as  Secretary  of 
the  National  Consumers’  League  from  1899  till  now,  and  chiefly 
as  a  resident  at  Hull  House,  and  later  at  the  Nurses’  Settlement, 
New  York. 

Cloth,  leather  back,  341  pages,  i2mo,  $ 1.25  net.  Citizens'  Library 

On  Charitable  Effort 

How  to  Help 

By  MARY  CONYNGTON,  of  the  Department  of  Commerce 
and  Labor,  Washington 

Not  only  is  the  professional  charity  worker  often  in  need  of  advice 
as  to  the  best  methods  of  investigation,  administration,  etc.,  but 
the  non-professional  worker,  with  his  zeal  unrestrained  by  special 
training,  is  even  more  emphatically  in  need  of  such  guidance  as 
this  sound  and  competent  book  gives. 

New  edition,  cloth,  i2mo,  $1.50  net 


THE  MACMILLAN  COMPANY 

Publishers  64-66  Fifth  Avenue  New  York 


The  Development  of  Thrift 

By  MARY  W.  BROWN,  Secretary  of  the  Henry  Watson 
Children’s  Aid  Society,  Baltimore 

“An  excellent  little  Manual,  a  study  of  various  agencies,  their 
scope  and  their  educating  influences  for  thrift.  It  abounds  in  sug¬ 
gestions  of  value*.” —  Chicago  Inter-Occan . 

Cloth ,  i2tno,  $1.00  net 

Friendly  Visiting  among  the  Poor 

By  MARY  E.  RICHMOND,  General  Secretary  of  the  Charity 
Organization  Society  of  Baltimore 

“A  small  book  full  of  inspiration,  yet  intensely  practical.” — 
Charles  Richmond  Henderson. 

Cloth,  i6mo,  $1.00  net 

The  Care  of  Destitute,  Neglected,  and 
Delinquent  Children 

By  HOMER  FOLKS,  Ex-Commissioner  of  Public  Charities, 
New  York  City 

Contents.  —  Conditions  prevalent  at  the  Opening  of  the  Nine¬ 
teenth  Century;  Public  Care  of  Destitute  Children,  1801-1875; 
Private  Charities  for  Destitute  Children,  1801-1875;  Removal  of 
Children  from  Almshouse;  The  State  School  and  Placing  Out 
System;  The  County  Children’s  Home  System;  The  System  of 
Public  Support  in  Private  Institutions;  The  Boarding  Out  and 
Placing  Out  System;  Laws  and  Societies  for  the  Rescue  of  Neg¬ 
lected  Children;  Private  Charities  for  Destitute  and  Neglected 
Children,  1875-1900;  Delinquent  Children;  Present  Tendencies. 

Cloth,  i2mo,  $1.00  net 

Constructive  and  Preventive  Philanthropy 

By  JOSEPH  LEE,  Vice-President  of  the  Massachusetts  Civic 
League 

Contents.  —  Essence  and  Limitations  of  the  Subject;  Before 
i860;  Savings  and  Loans;  The  Home;  Health  and  Building 
Laws,  Model  Tenements;  The  Setting  of  the  Home;  Vacation 
Schools;  Playgrounds  for  Small  Children;  Baths  and  Gymnasiums; 
Playgrounds  for  Big  Boys;  Model  Playgrounds;  Outings;  Boys’ 
Clubs;  Industrial  Training;  For  Grown  People;  Conclusion. 

Cloth,  i2mo,  $i.oo  net 


THE  MACMILLAN  COMPANY 

Publishers  64-66  Fifth  Avenue  New  York 


Some  Ethical  Gains  through  Legislation 

By  FLORENCE  KELLEY,  Secretary  of  the  National  Con¬ 
sumers’  League 

This  interesting  volume  has  grown  out  of  the  author’s  experience 
in  philanthropic  work  in  Chicago  and  New  York,  and  her  service 
for  the  State  of  Illinois  and  for  the  Federal  Government  in  inves¬ 
tigating  the  circumstances  of  the  poorer  classes,  and  conditions  in 
various  trades. 

The  value  of  the  work  lies  in  information  gathered  at  close  range 
in  a  long  association  with,  and  effort  to  improve  the  condition  of, 
the  very  poor. 

Cloth,  leather  hack,  i2mo,  $  1.25  net ;  by  mail,  $  1.35 


Wage-Earning  Women 

By  ANNIE  MARION  MacLEAN,  Professor  of  Sociology  in 
Adelphi  College 

“  This  book  needed  to  be  written.  Society  has  to  be  reminded  that 
the  prime  function  of  women  must  ever  be  the  perpetuation  of  the 
race.  It  can  be  so  reminded  only  by  a  startling  presentation  of 
the  woman  who  is  ‘  speeded  up  ’  on  a  machine,  the  woman  who 
breaks  records  in  packing  prunes  or  picking  hops,  the  woman  who 
outdoes  all  others  in  vamping  shoes  or  spooling  cotton.  .  .  .  The 
chapters  give  glimpses  of  women  wage-earners  as  they  toil  in  dif¬ 
ferent  parts  of  the  country.  The  author  visited  the  shoeshops,  and 
the  paper,  cotton,  and  woollen  mills  of  New  England,  the  depart¬ 
ment  stores  of  Chicago,  the  garment-makers’  homes  in  New  York, 
the  silk  mills  and  potteries  of  New  Jersey,  the  fruit  farms  of  Cali¬ 
fornia,  the  coal  fields  of  Pennsylvania,  and  the  hop  industries  of 
Oregon.  The  author  calls  for  legislation  regardless  of  constitutional 
quibble,  for  a  shorter  work-day,  a  higher  wage,  the  establishment 
of  residential  clubs,  the  closer  cooperation  between  existing  organ¬ 
izations  for  industrial  betterment.” — Boston  Advertiser. 

Cloth,  leather  hack,  i2mo,  $ 1.25  net ;  by  mail,  $1.35 


THE  MACMILLAN  COMPANY 

Publishers  64-66  Fifth  Avenue  New  York 


By  EDWARD  T.  DEVINE,  Ph.D.,  LL.D. 

Schiff  Professor  of  Social  Economy  in  Columbia  University 

General  Secretary  of  the  Charity  Organization  Society  of  New  York  City 
Editor  of  Charities  and  the  Commons 

The  Principles  of  Relief 

Cloth,  $ 2.00  net 

“Text-books  of  sociology  which  are  at  once  theoretical  and  prac¬ 
tical,  aiding  alike  the  citizen  who  seeks  to  fulfil  intelligently  his 
duty  toward  the  dependent  classes  and  the  volunteer  or  profes¬ 
sional  worker  in  any  branch  of  social  service,  are  rare  enough; 
and  Dr.  Devine’s  book  is  a  valuable  addition  to  this  class  of  liter¬ 
ature.  .  .  .  Comprehensive  in  scope,  and  masterly  in  treatment, 
the  book  shows  thorough  knowledge  of  all  phases  of  the  relief 
problem  of  to-day;  and  it  combines  with  the  student’s  careful 
presentation  of  facts  as  they  are,  the  humanist’s  vision  of  what 
they  yet  may  be.” — Boston  Transcript. 

“  A  distinct  contribution  to  the  literature  of  scientific  philanthropy. 
It  marks  a  step  in  the  development  of  that  literature,  for  in  it  are 
brought  to  consciousness,  perhaps  for  the  first  time  fully,  the 
underlying  principles  on  which  the  charity  organization  society 
movement  is  based.  Moreover,  it  undertakes  to  give  a  compre¬ 
hensive  statement  of  the  elementary  principles  upon  which  all 
relief  giving,  whether  public  or  private,  should  rest;  and  it  cor¬ 
relates  these  principles  with  the  general  facts  of  economics  and 
sociology  in  such  a  way  as  to  leave  no  doubt  in  the  mind  of  the 
reader  that  the  author  has  mastered  his  subject.  The  point  of 
view  of  the  book  is  constructive  throughout,  as  its  author  evi¬ 
dently  intends;  and  it  is  safe  to  say  that  for  many  years  to  come 
it  will  be,  both  for  the  practical  worker  and  for  the  scientific  stu¬ 
dent,  the  authoritative  work  upon  the  ‘Principles  of  Relief.’”  — 
Annals  of  the  American  Acade7ny. 

“  Independent,  eminent  common  sense,  a  logical  mind,  and  com¬ 
prehensive  knowledge  of  subject-matter,  make  ‘  Principles  of  Re¬ 
lief’  an  important  book.”  —  Boston  Advertiser. 


THE  MACMILLAN  COMPANY 


Publishers 


64-66  Fifth  Avenue 


New  York 


By  EDWARD  T.  DEVINE,  Ph.D.,  LL.D. 

General  Secretary  of  the  Charities  Organization  Society  of  New  York  City 


Efficiency  and  Relief 

A  Programme  of  Social  Work 

Being  the  inaugural  address  of  the  Schiff  Professor  of  Social 
Economy  in  Columbia  University,  with  an  Introduction  by  Presi¬ 
dent  Nicholas  Murray  Butler. 

Columbia  University  Press.  Cloth,  i6mo,  $  .75  net 

“  Rich  in  thought-productive  suggestions  for  those  who  read  with 
open  mind.”  —  Record-Herald ,  Chicago. 

“There  are  certain  books,  the  message  of  which  is  so  helpful,  im¬ 
portant,  and  far-reaching,  that  not  only  the  individual,  but  the 
community  and  the  State  as  well,  sustain  a  serious  loss  if  they  are 
left  unread.  ...  It  carries  an  appeal,  commanding  the  careful 
consideration  of  every  true  and  loyal  citizen.”  —  Baltimore  News. 

“The  little  book  is  packed  with  ideas.” —  The  Dial. 

“  Dr.  Devine  has  previously  laid  the  public  under  frequent  obliga¬ 
tions  to  him  by  his  clear-sighted  discussion  of  social  needs.  But 
he  has  never  heretofore  reached  the  high  note  that  sounds  clear 
through  this  discourse  like  the  trumpet  of  a  prophecy.”  — Atlantic 
Monthly. 

Economics 

Cloth,  i6mo,  $1.00  net 

A  discussion  of  the  economic  man  and  his  environment,  the  social 
conditions  of  an  economic  society,  consumption,  prosperity,  the 
standard  of  living,  value,  the  distribution  of  products,  the  organi¬ 
zation  of  credit  and  industry,  obstacles  to  social  progress  and  the 
disposition  of  the  social  surplus. 

Originally  prepared  for  the  A merican  Soci¬ 
ety  for  the  Extension  of  University  Teaching 


THE  MACMILLAN  COMPANY 


Publishers 


64-66  Fifth  Avenue 


New  York 


» 


